S & P 500 AT FRESH RECORD HIGH; SBI EARNINGS IN FOCUS AT HOME
While Dow closed absolutely flat, S & P 500 and Nasdaq gained 0.2% and 0.4% respectively with the S&P 500 settling at a record high amid slightly lower bond yields and as investors read mixed economic data as a sign that interest rates could stay lower for longer.
Existing home sales for April fell 3.3% percent, missing an expected 1% gain to 5.24 million unit. Manufacturing PMI came in at 53.8 for May, below expectations of 54.5. Weekly jobless claims came in at 274,000, above expectations of an increase to 271,000 from the prior week's 264,000. The May U.S. Philadelphia Fed Index showed a gain of 6.7. The Conference Board's leading indicator index, which forecasts future economic activity, showed a gain of 0.7 percent in April.
Yields edged lower after disappointing data, with the 10-year yield dipping below 2.20%. The dollar weakened, with the euro at $1.113.
Nymex oil climbed 3% or $1.74 to $60.72 a barrel. Gold fell $4.6 to $1204 an ounce.
European markets, except a marginally lower Italy, ended with modest gains. The May composite PMI figures from Markit showed the euro zone's economy continued to lose momentum in May. The index fell to 53.4 from 53.9 in April, below analyst expectations.
After falling nearly half a percent in the morning trade, benchmark indices recouped most of the lost ground by the end of trade to close little changed. Sensex settled at 27809, down 28 points while Nifty lost 2 points to finish at 8421. BSE mid-cap and small-cap indices lost 0.4% and 0.05% respectively. BSE Realty and Auto indices gained the most among the sectoral indices, rising 1% and 0.8% respectively while FMCG and Power indices were the top losers, giving away 0.8% and 0.6% respectively.
Bajaj Auto reported 18.5% dip in March quarter net profit at Rs 621.6 cr y-o-y. Total income fell 3.9% to Rs 4739 cr. Volumes declined 16.3% at 7.8 lakh units. Hit by other expenses, its reported margins decreased 120 basis points on yearly basis. What stood out was its gross margins that improved to 32.5% vs 31.7% sequentially due to higher realisations. Realisation was up 15% (Y-o-Y), up 5.4% (Q-o-Q) to Rs 60550 per unit.
FIIs net sold stocks and index futures worth Rs 186 cr and 313 cr respectively but net bought stock futures worth Rs 235 cr. DIIs were net buyets to the tune of Rs 404 cr.
Rupee appreciated 18 paise to end at 63.64/$.
Today morning, except a modestly lower Nikkei, other Asian markets are trading higher with Shaghai and Hang Seng leading the tally with gains of more than a percent. SGX Nifty is suggesting about 15 points lower opening for our market.
Ever since Nifty restored Higher Top Higher Bottom formation on its daily chart by closing above 8333 on Monday, we have been working with the major target of 8600, where the trendline adjoining tops made in March and April is placed. We have been advising holding on to trading longs with a trailing stop loss and that continues to be the view.
8330-8300 is the immediate support area, with the stop loss of which trading longs should be held on to.
ITC and SBI will report their quarterly earnings today.