GREECE SUBMITS PROPOSAL; IIP IN FOCUS AT HOME
After gaining nearly a percent and half in the opening trade, US indices saw a consistent downward drift through the session and finally ended higher by just a fifth of a percent as optimism over the China bounce faded and markets awaited proposal from Greece.
Earlier, Shanghai Composite climbed 5.8% for its best day in six years after China instituted new supportive measures, including restrictions on short selling and loosening of margin lending regulations
European markets surged 1.4%-3.5% with Italy leading the tally on Greek proposal hopes. Germany's Finance Minister Wolfgang Schaeuble conceded yesterday that Greece would need some debt restructuring as part of any new loan program to make its economy viable.
Nymex oil rose $1.13 to $52.78 a barrel.
The IMF trimmed down its expected global growth for 2015 to 3.3% from the previous 3.5%, citing weaker-than-expected economic activity in North America during the first quarter. For India however, the institute expects the higher growth of 7.5% versus 7.3%.
Benchmark indices ended modestly lower after a rangebound but choppy trading session, extending the losing streak to third straight day. Sensex settled at 27574, down 114 points while Nifty lost 34 points to finish at 8329. BSE mid-cap and small-cap indices lost 0.3% each. BSE Oil & Gas and IT indices tumbled 2% and 1.9% respectively, becoming top losers among the sectoral indices while Capital Goods index soared 1.9%, becoming the top gainer, followed by 0.5% rise in Power index.
FIIs net sold stocks, index futures and stock futures worth Rs 254 cr, 1247 cr and 497 cr respectively. The open interest in index futures went down by 19000 contracts, indicating long unwinding. DIIs were net buyers to the tune of Rs 79 cr.
Rupee appreciated 21 paise to end at 63.385/$.
TCS reported 3.5% q-o-q dollar revenue growth at USD 4036 mn for the quarter ended June, which was lower than the estimated 4.2% rise. In Rupee terms, revenues grew 6% to Rs 25668 cr. Profit however came in better-than-estimates, falling 3.3% to Rs 5709 cr, the expectation being of a 7.5% fall. Margins declined 91 bps to 26.3% as aginst the estimated figure of 25.64%. Greece has submitted its proposal for economic policy overhauls and budget cuts which are said to be closer to creditors' demands. Eurozone finance ministers and European leaders are set to assess the proposals during crisis meetings on Saturday and Sunday.
Today morning Shanghai and Hang Seng are up about 4% and 2% respectively, other Asian markets are trading with modest gains and SGX Nifty is suggesting a marginally higher start for our market.
Nifty, on Wednesday, broke the immediate support of 8430, below which we were working with downside targets of 8335 and 8270, which are the 61.8% retracement level of the recent 8195-8561 rally and 34-DMA respectively. The benchmark yesterday closed at 8328.
Traders would do well to book profit in short positions and remain on sideline as Nifty has still not violated the higher-top higher-bottom formation on the daily chart. From that perspective, 8195, the immediate previous bottom on the daily chart, would be the important support to eye.
On the way up, immediate hurdle on the hourly chart has moved lower to 8440, a crossover of which should be awaited before initiating fresh longs.
India’s IIP for May would be released today and is expected to show a growth of 4.4%, up from 4.1% in April.