Published on November 1, 2018
1. PRUDENT MORNING MANTRA 10408-10440 IS THE RESISTNACE ZONE; 10170 IMMEDIATE SUPPORT WORLD MARKETS Dow and S & P 500 climbed 1% each while Nasdaq soared 2%, extending the upmove to second straight day, as strong earnings from General Motors and Facebook lifted sentiment. Data from ADP and Moody's Analytics showed private payrolls rose by 227,000 in October For the month, S&P 500 lost 6.9%, its biggest one-month slide since September 2011. The Dow dropped 5.1% to post its biggest monthly fall since January 2016. The Nasdaq plunged 9.2%, its largest monthly pullback since November 2008. US oil fell 86 cents or 1.3% to $65.31 and Brent eased 44 cents to $75.47 a barrel. For October, WTI fell 10.8% while Brent was off 9%. European markets gained 0.3%-2.3%, with CAC on the top. Euro zone inflation accelerated to 2.2% in October from 2.1% in the month prior. Sterling rallied after a government letter was published that suggested the U.K. believed that the Brexit withdrawal agreement will be finalized within 3 weeks. AT HOME After falling nearly a percent in the initial trade, Sensex and Nifty made a grand come back later to end with gains of 1.6% and 1.8% respectively. Sensex settled at 34442, up 550 points while Nifty added 188 points to finish at 10386. BSE mid-cap and small-cap indices added 1.6% and 1.4% respectively. Except 1.4% lower Metal index, all the BSE sectoral indices ended in green with IT and Teck indices leading the tally, up 3.5% and 3.2% respectively. FIIs net sold stocks worth Rs 194 cr but net bought index futures and stock futures worth Rs 737 cr and 1172 cr respectively. DIIs were net buyers to the tune of Rs 1125 cr. Rupee depreciated 27 paise to end at 73.95/$. India jumped 23 counts in the World Bank's Ease of doing business ranking from 100 to 77. Tata Motor's consolidated earnings disappointed. Consolidated revenue rose 3% to Rs 72112 cr, EBITDA fell 28% to Rs 6257 and on net level there was a loss of Rs 1049 cr. JLR revenue fell 11% and margin fell 270 bps. The company cut FY19 earnings, CAPEX and margin guidance for JLR owing weakness in China. LT was an allround beat. Revenue rose 21.3% to Rs 32080 cr, EBITDA was up 27.3% at Rs 3770 cr, margin expanded 60 bps to 11.8% and net profit was up 22.5% at Rs 2230 cr. The company maintained FY19 order inflow guidance at 10-12% and revenue guidance at 12.15%.
2. OUTLOOK Today morning, Nikkei is down half a percent but Hang Seng and Shanghai are up 1% and 0.5% respectively. SGX Nifty is suggesting about 20 points higher start for our market. In yesterday's report we had said that 10275 continues to be immediate hurdle, upon crossover of which, 10408-10440 would be the next resistance zone. We had also said that 10140 continues to be immediate support. Nifty, went below 10140 support in first hour but did not sustain there and surged all the way to 10396 before closing at 10386 and is set to open above 10400 today. 10408-10440 continues to be resistance zone to eye where 10408 is the top made last week and 10440 is the 61.8% retracement level of the 10710-10004 fall. Once 10440 is taken out decisively, 10710 would be the next major hurdle to eye. Immediate support on the hourly chart has moved up to 10170, with the stop-loss of which, existing longs can be held on to. Auto companies will report October sales figure while HDFC and HPCL will report their quarterly earnings today. Disclaimer: This document has been prepared by Prudent Broking Services (P) Ltd. and is being distributed in India by Prudent Broking Services (P) Ltd., a registered broker dealer. The information in the document has been compiled by the research department. Due care has been taken in preparing the above document. However, this document is not, and should not be construed, as an offer to sell or solicitation to buy any securities. Any act of buying, selling or otherwise dealing in any securities referred to in this document shall be at investors sole risk and responsibility. This document may not be reproduced, distributed or published, in whole or in part, without prior permission from the Company. To unsubscribe, send a mail to firstname.lastname@example.org