LARGEST FALL IN FOUR MONTH TAKES NIFTY TO FOUR AND HALF MONTH LOW

LARGEST FALL IN FOUR MONTH TAKES NIFTY TO FOUR AND HALF MONTH LOW

WORLD MARKETS                             

US indices fell about half a percent, spooked by higher bond yields and ADP jobs report.

ADP employment report showed 169000 jobs created in April, missing expectation for a rise of 200000. While the ADP report focuses on the U.S. private sector, it is usually seen as a pre-cursor to the all-important nonfarm payrolls data. In other economic news, unit labor costs for the first quarter rose 5% but productivity fell 1.9%, a tad more than the expected 1.8% decline. Weekly mortgage applications fell 4.6%.

Meanwhile, comments from Federal Reserve chair Janet Yellen that the equities market is overvalued added to the market anxiety.

Dollar index fell more than a percent to 94.16 from 95.14. Euro topped $1.13 for the first time since the end of February.

Yields on the 10-year U.S. Treasury hit a high of 2.25%, with the 30-year yield at 2.99%.

European markets gained upto 0.4%. Eurozone final composite PMI for April came in at 53.9, above a flash estimate of 53.5.

Nymex oil rose 53 cents to $60.93 a barrel.

AT HOME

It was carnage on Dalal Street as benchmark indices plunged more than two and a half percent, registering the largest single day fall in four months and closing at the lowest level in nearly four and a half month. Sensex sank 723 points to settle at 26717 while Nifty finished at 8097, down 228 points. BSE mid-cap and small-cap indices lost 3.3% and 3.1% respectively. All the BSE sectroal indices ended in red with Capital Goods and Realty indices leading the tally, giving away 4.2% and 4% respectively.

India's HSBC services PMI fell to a three month low of 52.4 in April from 53 in March. The composite PMI eased to 52.5 from 53.2.

FIIs net sold stocks and index futures worth Rs 1700 cr and 1925 cr respectively but net bought stock futures worth Rs 1832 cr. DIIs were net buyers to the tune of Rs 1455 cr.

Rupee fell 10 paise to end at 63.54/$.

The Lok Sabha yesterday passed the much-delayed Constitution Amendment Bill to Goods and Service Tax (GST), paving the way for a new bill on the uniform tax regime, even as the Congress Party staged a walkout in protest. However, the Bill is likely to face stiff opposition at the Rajya Sabha and may be routed to the Standing Committee.

Amara Raja, Castrol, Ceat, Bajaj Finance, Pidilite, Page Industries and SRF will be included in derivative segment from May 29.

OUTLOOK

Today morning Asian markets are down 0.5%-1% and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that trading longs can be held on to with the stop loss of 8240. Nifty breached this level in the first hour itself and plunge all the way to 8083 before closing at 8097.

7961, the bottom made in December, is the next support to eye on the way down. A breach of 7961 can take the benchmark all the way to 7600, which is the 38.2% retracement level of the entire 5118-9119 upmove seen between August 2013-March 2015.

Immediate resistance on the hourly chart is placed around 8240, with the stop loss of which trading shorts can be held on to.

Hero Motocorp will report its quarterly earnings today.