STAY LONG WITH THE STOP LOSS OF 8200

STAY LONG WITH THE STOP LOSS OF 8200

WORLD MARKETS                             

Dow and S & P 500 lost half a percent while Nasdaq fell 0.2% yesterday on the back of renewed bond selloff.

Major government debt markets resumed their selloff yesterday, resulting in higher bond yields. The U.S. 10-year Treasury yield rose to 2.27 percent. The 30-year bond yield topped 3.03 percent. The German 10-year bund yield rose to 0.62 percent.

Media reports suggested that Greece paid about 750 million euros to the International Monetary Fund yesterday, a day before it was due

In Europe, FTSE, DAX and CAC lost 0.2%, 0.3% and 1.2% respectively while Italy and Spain ended marginally higher.

Nymex oil fell 14 cents or 0.2% to $59.25 a barrel. Gold fell $6 to $1183 an ounce.

AT HOME

After a gap up opening, benchmark indices extended the gains through the session to end with hefty gains of a percent and half. Sensex soared 402 points to settle at 27507 while Nifty finished at 8325, up 134 points. BSE mid-cap and small-cap indices gained 2.1% and 1.3% respectively. Except a 0.3% cut in BSE FMCG index, all the sectoral indices ended higher with Auto and Metal indices leading the tally, soaring 2.5% each.

FIIs net bought stocks, index futures and stock futures worth Rs 170 cr, 293 cr and 843

cr respectively. DIIs were net buyers to the tune of Rs 329 cr.

Rupee appreciated 9 paise to end at 63.85/$.

Lok Sabha yesterday passed Black money bill which provides for penalty and tax up to 120% along with criminal prosecution for those who have parked black money abroad.

Government yesterday decided to send the controversial land acquisition bill to the joint committee of Parliament in view of continued opposition to the proposed legislation.

To assuage concerns of foreign portfolio investors slapped with MAT demand, the government yesterday put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities. Finance Ministry issued a circular to international taxation wings of the Income Tax department following constitution of a high-level committee headed by Justice (Retired) A P Shah, Chairman, Law Commission, to look into the issue of levy of minimum alternate tax (MAT) on capital gains made by FIIs in past years.   

OUTLOOK

Today morning, except a modestly higher Shanghai, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 10 points lower start for our market.

In yesterday's report we had mentioned that 200 DMA as well as a trendline adjoining recent tops on daily chart are placed around 8280 and that would be the immediate hurdle on the way up, a crossover of which would open up the space for the further upside till about 8420 where the 34-week moving average is placed.

We had also advised holding on to existing longs with the stop loss of 8120.

The benchmark yesterday soared 134 points to settle at 8325, crossing the 8280 hurdle mentioned above.

8420, the 34-week moving average, which is also the 50% retracement level of the recent 8845-7997 fall, continues to be immediate target on the way up.

Immediate support on the hourly chart is placed around 8200, with the stop loss of which trading longs should be held on to.

CPI for April will be released today and is expected to show a reading of 5.04%, down from 5.17% in March. March IIP will also come out today and is expected to show a growth of 2.8% as against 5% uptick in February.

Dr Reddy will report its quarterly earnings today.