10725 ABOVE 10614; 10276 CONTINUES TO BE IMPORTANT SUPPORT

10725 ABOVE 10614; 10276 CONTINUES TO BE IMPORTANT SUPPORT

WORLD MARKETS

US indices reversed morning gains to end with cuts of 0.1%-0.9% with Nasdaq losing the most following a rise in the treasury yields.

The 10-year yield traded at 2.845% amid news that U.S. Senate leaders had come to an agreement over a two-year budget agreement ahead of a Thursday deadline that would have resulted in a government shutdown.

Oil tumbled to touch one-month low after data showed US crude inventories and production rose last month. WTI crude fell 2.5% to $61.79 while Brent lost 2% to settle at $65.51 a barrel.

Chicago Fed President Charles Evans said that no rate hikes are needed before mid-2018. Dallas Fed President said that rising U.S. wages may not push inflation higher.

European markets gained 1.6-2.9%.

AT HOME

After gaining more than a percent at the open, benchmark indices saw a sustained downward move through the session to end with modest losses, extending the losing streak to seventh straight day. Sensex settled at 34082, down 113 points while Nifty lost 21 points to finish at 10476. Broader market however outperformed with BSE mid-cap and small-cap indices up 0.4% and 2% respectively.  BSE Oil & Gas and Realty indices climbed 1.7% and 1.5% respectively, becoming top gainers among the sectoral indices while Telecom index was the top loser, down 1.1%, followed by 0.6% lower Teck and IT indices.

FIIs net sold stocks and index futures worth Rs 1022 cr and 1751 cr respectively but net bought stock futures worth Rs 1242 cr. DIIs were net buyers to the tune of Rs 461 cr.

Rupee depreciated 3 paise to end at 64.27/$.

Cipla posted 4.8% rise in net profit at Rs 403.5 cr and revenue growth of Rs 7.3% at Rs 3914 cr. Operating profit rose 21.1% to Rs 819 cr and margin expanded 230 bps to 20.9%.

Aurobindo Pharma came out with largely in-line with estimated numbers. Net profit rose 2.8% to Rs 595 cr and revenue rose 11.2% to Rs 4369 cr. Operating margin stood at 23.7%.

OUTLOOK

Today morning, Shanghai is down nearly a percent but Nikkei and Hang Seng are up 0.6% each. SGX Nifty is suggesting about 50 points higher start for our market.

In yesterday's report we had mentioned that Nifty, on Tuesday, had rebounded after testing crucial support zone between 20 and 34-week moving averages placed at 10400 and 10180 respectively and 10276, the bottom made on that day, is the important support to eye. We had also said that 10725 followed by 10875, the 50% and 67% retracement levels of the recent 11171-10276 fall, are the resistance levels to eye on the way up

Nifty, after touching a high of 10614 at the open, eased to end at 10476 and is set to open above 10500 today.

10614, the top made yesterday, is the immediate hurdle above which 10725 would be next target to eye.

10276 continues to be important support.

ACC will report its quarterly earnings today.