Monday, July 6, 2015



WORLD MARKETS                             

US markets were shut on Friday for Independence Day holiday.

European markets lost 0.4%-0.7% on Friday ahead of Sunday's Greek referendum.

Earlier Shanghai Composite plunged nearly 6% on the news that authorities in Beijing were investigating suspected market manipulation.

For the week, US indices lost 1.2%-1.4% while European markets tumbled 2.5%-5.5%. Shanghai Composite plunge 12%.


Benchmark indices ended higher by half a percent after a reangebound but choppy trading session. Sensex gained 145 points to settle at 28093 while Nifty finished at 8485, up 40 points. BSE mid-cap index lost 0.02% while the small-cap index gained 0.03%. BSE Bankex and Capital Goods index gained 0.8% and 0.6% respectively, becoming top gaienrs among the sectoral indices while Metal index plunged 1.5%, becoming top loser, followed by 0.5% cut in Realty index.

FIIs net bought stocks, index futures and stock futures worth Rs 356 cr, 361 cr and 322 cr respectively. DIIs were net sellers to the tune of Rs 221 cr.

Rupee appreciated 7 paise to end at 63.44/$.

India's HSBC Services PMI fell to 47.7 in June, down from 49.6 in May - its lowest level since March 2014. The composite PMI fell to 49.2 in June from 51.2 in May, below the crucial 50-level for the first time since April 2014.

For the week, Sensex and Nifty gained 1% and 1.2% respectively.


In the Greek referendum held yesterday, 61% of voters rejected the terms of new financial aid which included demands for tax hikes and pension cuts in Greece. The result - more definitive than polls had predicted - has increased Greece's chances of exiting the euro zone as it will be very difficult for a new deal to be struck without significant concessions from the Greeks while Greek Prime Minister Alexis Tsipras' victory will make that unlikely.

Greek PM said that negotiations between Athens and its creditors will start Monday. He also said that Greece will insist on debt restructuring being on the table at those talks. ECB governing council will meet today to decide on Greece’s monetary lifeline, the Emergency Liquidity Assistance (ELA) program, which provides vital funds to the country’s financial system. Eurozone leaders will meet at an emergency summit tomorrow to deliberate on the issue.

Today morning Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 50 points lower opening for our market. Nymex oil is down $1.9 or 3.3% at $55.1 a barrel and Brent is off 1% at $59.80 a barrel. Euro fell more than a percent to $1.098 in early trade. US index futures were down about a percent.

Shanghai Composite however opened higher by nearly 8% after the China Securities Regulatory Commission (CSRC) said China would cut initial public offerings (IPOs) and capital raisings and support long-term investors entering the market to help stabilize prices and the People's Bank of China (PBOC) also rolled over 250 billion yuan of medium-term loans to banks late on Friday to ensure adequate liquidity in the system. Also China's top 21 securities brokerages said on Saturday that they would collectively invest at least 120 billion yuan ($19.3 billion) to help stabilize the country's stock markets

For whole of last week and especially on Friday, we maintained our stance that traders should stay light as Nifty negotiates with the tough 8470-8490 resistance area, where 20 as well as 34-week moving averages and previous weekly top were placed.

Nifty, on Friday closed at 8485, a tad lower than the crucial 8490 hurdle, but is set to open with a downward gap today.

We would reiterate our stance that a close above 8490 is required to negate the bearish lower-top lower-bottom formation on the weekly chart. On the way down 8380 is the immediate support on the hourly chart, below which 34-DMA, placed at 8270, would be the next target.

A crossover of 8490 should be awaited before initiating fresh longs. 

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