8490 CONTINUES TO BE MAJOR HURDLE; 8330 IMMEDIATE SUPPORT

8490 CONTINUES TO BE MAJOR HURDLE; 8330 IMMEDIATE SUPPORT

WORLD MARKETS                             

After a positive start, US indices saw a sustained downward move through the session to end with cuts of 0.2%-0.4% as lack of resolution between Greece and its creditors weighed on sentiment.

The Eurogroup meeting of finance ministers quickly ended yesterday, without any signs of an agreement. Another meeting was scheduled for Saturday as the June 30 deadline approaches.

US Hospital stocks however surged after the U.S. Supreme Court ruled that federal subsidies that help nearly 6.4 million people pay for their Obamacare health plans are legal under the Affordable Care Act.

Weekly jobless claims came in at 271,000, slightly below expectations. U.S. consumer spending rose 0.9% for the month of May, its largest gain in nearly six years while personal income increased 0.5% last month. The services PMI fell from 56 in May to 54.6 in June, showing a slower growth rate in the services sector.

European markets ended mixed.

Nymex crude fell 57 cents or 1% to $59.70 a barrel.

AT HOME

Sensex and Nifty ended higher by 0.6% and 0.4% respectively on the expiry day of the June derivative series. In absolute terms, Sensex gained 166 points to settle at 27896 while Nifty finished at 8398, up 37 points. BSE mid-cap and small-cap indices gained 0.7% and 0.2% respectively. BSE Capital Goods index soared 2.1%, becoming top gainer among the sectoral indices, followed by 1% rise in Realty index. IT and Teck indices were the top losers, giving away 1% and 0.6% respectively.

FIIs net bought stocks and index futures worth Rs 280 cr and 2225 cr respectively but net sold stock futures worth Rs 1082 cr. DIIs were net sellers to the tune of Rs 8 cr.

Rupee depreciated 2 paise to end at 63.6175/$.

Prime Minister Narendra Modi yesterday launched the NDA government's flagship Pradhan Mantri Awas Yojana (PMAY) housing scheme, along with its long-planned Smart Cities mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) urban renewal initiative. As part of the three missions, the government will look to create 2 crore houses by 2022 by providing a central grant of Rs 1 lakh to Rs 2.3 lakh per house by way of a 6.5% interest subvention scheme; look to create 100 smart cities through a Rs 48,000 crore initiative; and push for urban infrastructure upgrade for 500 cities in a Rs 50,000 crore scheme.

The Reserve Bank of India yesterday released the Financial Stability Report (FSR) according to which the total bad loans for banks as percentage of total assets will rise to 4.8%t by September from 4.5% in March. The stressed assets, however, will see a fall to 4.7% by next March.

OUTLOOK

Today morning, Shanghai is down near 3%, Hang Seng is down about a percent and half, other Asian markets are flat to modestly lower and SGX Nifty is suggesting about 40 points lower opening for our market.

We continue to reiterate our view that Nifty is in the vicinity of very important hurdles in the form of 34 and 20 week moving averages placed around 8470 and 8480 respectively, followed by immediate previous top on the weekly chart placed at 8490.

Therefore we had advised booking profit in majority of the trading positions above 8400 day before yesterday and wait for the crossover of 8490 for taking fresh longs. That continues to be the view.

Immediate support on the hourly chart has now moved up to 8330, which should serve as the stop loss for remaining positions. 8240, the 34-DMA would be the next support below 8330.