GREEK JITTERS PRESSURE WORLD EQUITIES; NIFTY HOLDS 7960 SUPPORT BY THE SKIN OF TEETH
US indices lost 0.6%-0.8% on Friday on account of continued uncertainty over Greece.
The standoff between Greece and its creditors worsened on Thursday after the International Monetary Fund walked out on talks with Athens, citing "major differences" over how to save the country from bankruptcy. The ATHEX Composite ended nearly 6%. Greek bonds sold off, with yields on 10-year government debt climbing to 11.8%.
Following the failed talks, senior euro zone officials reportedly discussed a "plan B" for a Greek debt default for the first time. Reuters reported that a deal with Greece in June was not seen as likely, citing euro zone officials.
Back in the US, the Producer Price Index increased 0.5% for May, topping expectations for 0.4%. The gain was the largest since May 2012. The ex-food and energy read was 0.1%. The preliminary Michigan consumer sentiment posted 94.6 for June, an increase from May's final read of 90.7.
European markets tumbled 0.9%-1.4%. After a revised 0.4% fall in March, production rose by just 0.1% in April, which dragged the annual growth rate down to just 0.8%.
Nymex oil fell 81 cents or 1.33% to $60 a barrel. Brent crude fell 81 cents to $64.30 a barrel.
For the week, Dow gained 0.3%, S & P 500 rose 0.1% while Nasdaq lost 0.3%. European markets, except a 0.1% higher Italy, ended with cuts of upto 0.4%.
Benchmark indices ended higher by a fifth of a percent after a choppy trading session on Friday. Sensex gained 54 points to settle at 26425 while Nifty finished at 7983, up 18 points. BSE mid-cap index gained 0.3% but the small-cap index lost 0.4%. BSE Bankex climbed 1.1%, becoming top gainer among the sectoral indices, followed by 0.4% rise in Power index. IT and Metal indices were the top losers, giving away 1.6% and 1.4% respectively.
FIIs net sold stocks and stock futures worth Rs 671 cr and 42 cr respectively but net bought index futures worth Rs 120 cr. DIIs were net buyers to the tune of Rs 706 cr.
Rupee depreciated 9 paise to end at 64.06/$.
For the week, Sensex and Nifty lost 1.3% and 1.6% respectively, extending the losing streak to third straight week.
India's industrial output, as represented by IIP, surged 4.1% in April as against expectation of a 1.2% growth and 2.1% uptick registered in March.
May CPI stood at 5.01%, in-line with estimate but up from 4.87% in April. Vedanta Group yesterday announced a merger between its flagship Indian mining firm Vedanta Limited and its oil subsidiary Cairn India wherein shareholders of Cairn India will receive one equity share in Vedanta for each share held, along with one 7.5% redeemable preference share with Rs 10 face value.
Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 15 points lower opening for our market.
In Friday's report we had mentioned that "A breach of 7960, on weekly basis, would mark a breakdown and only meaningful support to eye in that case would be 20-month moving average, which is currently placed around 7600". Nifty, after touching a low of 7940, recovered to end at 7983, holding on to 7960 support on closing basis.
7960, where the lower bad of bollinger on weekly chart is placed, continues be important support, a weekly close below can eventually take Nifty to 20-month moving average as mentioned above.
Immediate hurdle on the hourly chart is placed around 8070 which should serve as the stop loss for trading shorts.
India's trade data and WPI for May would be released today. WPI inflation is likely to show a print of negative 2.5% as against negative 2.65% in April.