US INDICES SOAR ON “GOLDILOCKS” JOBS REPORT; 8280 IMMEDIATE HURDLE IN NIFTY
US indices soared 1.2%-1.5% on Friday as investors cheered a jobs report that showed economic growth but not enough, in the eyes of most, to warrant central bank tightening immediately.
April's U.S. nonfarm payrolls report showed a rebound in job growth to 223,000, but slower wage growth at just a tenth of a percent. The improvement from March's 85,000 jobs calmed some nerves over the state of the U.S. economy, but wage growth was not enough, in the eyes of most traders, to warrant central bank tightening immediately March’s disappointing report was revised lower for the weakest figure since June 2012.
Bond yields edged lower, with the U.S. 10-year ending the week at 2.14%, after falling as low as 2.11% in intraday trade. The U.S. bond market had sold off sharply in the previous week, following gains in the German bund yield amid anticipation that Friday's report could induce a rate hike sooner rather than later.
Wholesale inventories rose 0.1% in March, versus 0.3% gain estimates.
European markets gained 2%-2.6% after a more decisive-than-expected U.K. election outcome by the center-right Conservative party. Sterling surged against the dollar on the news, trading as high as $1.5511, compared with around $1.5253 overnight, and hung onto most gains throughout the trading day
Nymex oil rose 45 cents to $59.39 a barrel. Brent fell 15 cents to $65.39 a barrel.
For the week Dow and S & P 500 gained 0.9% and 0.4% respectively while Nasdaq ended a tad lower. European markets gained 0.4%-2.2%
The People's Bank of China (PBOC) yesterday announced a cut in its benchmark lending rate and one-year deposit rates by 25 basis points, marking third such cut since November, in a bid to arrest slowing growth.
After a gap up opening, benchmark indices extended the gains though rest of the session to end with hefty gains of little less than 2%, breaking the 3-day losing streak. Sensex soared 506 points to settle at 27105 while Nifty finished at 8191, up 134 points. BSE mid-cap and small-cap indices gained 1.7% each. Except a 1.6% cut in BSE Consumer Durable index, all the sectoral indices ended in green with Realty index leading the tally, up 4.1%, followed by 2.7% rise in Auto index.
FIIs net sold stocks worth Rs 438 cr but net bought index futures and stock futures worth Rs 195 cr and 1115 cr respectively. DIIs were net buyers to the tune of Rs 1114 cr.
Rupee appreciated 30 paise to end at 63.93/$.
PNB plunged after reporting 62% dip in fourth quarter net profit at Rs 307 cr. NII fell 5.3% to Rs 3791 cr. Gross NPAs climbed to 6.55% from 5.97% q-o-q. Net NPAs rose to 4.06% from 3.82%.
HUL reported 16.7% rise in net profit at Rs 1018 cr supported by exceptional gain of Rs 179 cr. Total income grew by 8.2% to Rs 7675 cr. Volume growth stood at 6%. Operating margin expanded by 200 bps to 17.2%.
For the week, Sensex and Nifty gained 0.3% and 0.1% respectively, breaking the three-week losing streak.
Today morning Nikkei is up more than a percent, Shanghai and Hang Seng are up just under a percent and SGX Nifty is suggesting about 40 points higher opening for our market.
On Friday, Nifty had surged 134 points to end at 8191. A 60 point gap up today will take it closer to 8250.
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.
On the way down, 7997, the low made last week, is the crucial support to eye.
Traders are advised to wait for the crossover of 8280 for initiating fresh longs. Existing longs can be held with the stop loss of 8120, the low made on Friday.
BoB will report its quarterly earnings today.