S & P AT RECORD CLOSING HIGH; 8333-7997 CONTINUES TO BE IMMEDIATE RANGE FOR NIFTY
Dow and S & P 500 surged 1.1% each while Nasdaq climbed 1.4% yesterday on the back of calmer bond markets and a weaker dollar with the S & P 500 setting a new closing record of 2121.
The U.S. 10-year Treasury yield fell to 2.24%, off Tuesday's high of 2.366%. Dollar index further eased to 93.39 from 93.61 and the euro topped $1.14 for the first time since February.
Weekly jobless claims came in at 264,000, a touch below last week's 265000 and below expectations of an increase to 272000. The producer price index for April fell 0.4%, with the core figure down 0.2%, missing expectations for a slight gain.
Nymex oil fell 62 cents to $59.88 a barrel. Gold rose $7 to $1225 an ounce, the highest close since Feb 13.
European markets gained 0.3%-1.8%. Shares of steel producers surged after European Union's decision to impose a duty on imports of electrical steel.
After plunging more than a percent in the initial trade, benchmark indices recovered through rest of the session to end just marginally lower. Sensex settled at 27206, down 45 points while Nifty lost 11 points to finish at 8224. BSE mid-cap and small-cap indices however gained 0.9% each. BSE Realty and Oil & Gas indices gained 1.1% and 1% respectively, becoming top gainers among the sectoral indices while IT and Consumer Durable indices were the top losers, down 0.7% and 0.4% respectively.
FIIs net sold stocks and index futures worth Rs 74 cr and 1662 cr respectively but net bought stock futures worth Rs 111 cr. DIIs were net buyers to the tune of Rs 303 cr.
Rupee appreciated 35 paise to end at 63.65/$.
Wholesale price index (WPI)-based inflation for April fell to a new low of -2.65%, the sixth successive month of deflating prices. The WPI reading for March was -2.33%. Food articles inflation slowed to 5.73% from 6.31% in March. Primary articles inflation stood at -0.25% Vs 0.08%. Fuel, Power group inflation came in at -13.03% Vs -12.56%.
The onset of the southwest monsoon, which accounts for 70% of annual rainfall, is expected on May 30, according to India Meteorological Department.
Today morning Hang Seng and Nikkei are up about half a percent but Shanghai is down nearly a percent and other Asian markets are trading with modest cuts. SGX Nifty is suggesting about 30 points higher opening for our market.
In yesterday's report we had mentioned that 7997 and 8333, which are the immediate previous bottom and top respectively on the daily chart, are the key levels to watch. A crossover of 8333 will confirm a higher-top and higher-bottom formation on the daily chart along with a cup & handle formation on the hourly chart and would pave the way for the further upside till about 8600.
That continues to be the view. Traders are advised to wait for the crossover of these two boundaries for taking a fresh view on Nifty.