NIFTY AT 7½ MONTH LOW AFTER SEVEN DAYS OF LOSSES; TRAIL STOP LOSS TO 8100 IN TRADING SHORTS

NIFTY AT 7½ MONTH LOW AFTER SEVEN DAYS OF LOSSES; TRAIL STOP LOSS TO 8100 IN TRADING SHORTS

WORLD MARKETS                             

US indices ended little changed, eyeing recovery in bond yields and economic indicators that could shed light on the timing of a rate hike, amid continued Greece debt negotiations.

The US 10-year Treasury note yield traded near 2.43% after briefly hitting 2.449%, the highest since Oct 3, 2014. German 10-year bund yield also climbed, holding near 0.95%.

The Job Openings and Labor Turnover Survey showed 5.376 mn job openings in April, the highest since December 2000. Wholesale inventories showed an increase of 0.4% in April, above expectations of a 0.2% rise. US small business confidence increased to a five-month high of 98.3 in May.

In the continuing Greek saga, media reports suggested that Greece and its international creditors were discussing an extension of the country's bailout program through to March 2016. Another report said that Greek leaders would work to resolve differences with its creditors in order to finalize a deal on Wednesday.

European markets, except a modestly higher Spain, fell 0.2%-0.6%. A second reading of first quarter GDP for the euro zone came in at a 0.4% compared to the previous quarter. That was just above earlier estimates.

Nymex oil rose $2 or 3.44% to $60.14 a barrel. Gold rose $4 to $1178 an ounce.

AT HOME

Benchmark indices fell about a fifth of a percent, with Nifty and Sensex losing streak to seventh and sixth straight day respectively. Sensex lost 42 points to settle at 26481 while Nifty finished at 8022, down 22 points. BSE mid-cap and small-cap indices lost 0.3% each. BSE Realty and Healthcare indices lost 1.5% and 1.4% respectively, becoming top losers among the sectoral indices while Consumer Durable and Metal indices were the top gainers, up 1% and 0.8% respectively.

FIIs net sold stocks worth Rs 645 cr but net bought index futures and stock futures worth Rs 157 cr and 297 cr respectively. DIIs were net buyers to the tune of Rs 692 cr.

Rupee appreciated 16 paise to end at 63.92/$.

OUTLOOK

Data coming out of Japan showed core machinery orders unexpectedly rose 3.8% in April, beating expectations of a 2% decline and following a 2.9% month-on-month rise in March.

MSCI yesterday said that it expects to add China's A-shares, those stocks denominated in yuan and listed in either Shanghai or Shenzhen, to its widely tracked Emerging market index at some point in the future when China resolves certain market-access issues.

Asian markets, except a percent lower Shanghai, are trading with modest gains and SGX Nifty is suggesting about 15 points lower opening for our market.

Nifty yesterday touched a low of 8005 and closed at 8022. As we have been mentioning 7997-7961 continues to be crucial support zone where 7991 is the bottom made in May and 7961 is the bottom made in December 2014. This support zone also coincides with the lower band of bollinger on the weekly chart, upon breach of which, next meaningful support to eye would be 7640, where the 20-month moving average is placed.

We have been advising holding on to trading shorts with a trailing stop loss since immediate support of 8350 was breached on 2nd June. That continues to be the view.

Immediate hurdle on the hourly chart has now moved lower to 8100, which should serve as the revised stop loss for short positions.