STEEPEST FALL IN A MONTH FOR NIFTY; TCS EARNINGS IN FOCUS
US indices plunged 1.5%-1.7% yesterday as the market turmoil in China eclipsed the events in Greece and as the New York Stock Exchange suffered a nearly four hour outage.
China's, Shanghai Composite closed nearly 6% lower despite supportive government measures.
Greek Prime Minister Alexis Tsipras addressed the European Parliament yesterday, lambasting Europe's advocacy of austerity and the efficacy of Greece's bailout programs since 2010, but promised a detailed, "concrete" deal would be presented in the next two to three days.
The Federal Open Market Committee (FOMC) minutes from the June meeting showed policymakers were concerned about the situation in Greece and China, with most judging that rate hike conditions were not yet achieved.
Italy climbed 2.6%. Other European markets gained in the vicinity of 0.8% amid hopes of a Greece deal.
Dollar index fell about half a percent as the euro gained to above $1.10. Nymex oil fell 68 cents or 1.3% to $51.65 a barrel.
After a gap down opening on the back of Greek worries and metal sell-off on account of China factor, benchmark indices added to the losses through the choppy session and finally ended with deep cuts of 1.7%, registering the steepest fall in a month. Sensex slumped 484 points to settle at 27688 while Nifty finished at 8363, down 148 points. BSE mid-cap and small-cap indices lost 1.3% each. All the BSE sectoral indices ended in red with Metal index leading the tally, down 3.9%, followed by 2.2% cut in Auto index.
FIIs net sold stocks, index futures and stock futures worth Rs 354 cr, 271 cr and 899 cr respectively. DIIs were net sellers to the tune of Rs 347 cr.
Rupee depreciated 13 paise to end at 63.595/$.
Today morning Hang Seng is up about 3%, Shanghai, after opening about 3% lower, has recouped all the losses and is now trading flat, other Asian markets too are off the low and SGX Nifty is suggesting a flattish opening for our market.
In yesterday's report we had mentioned that a gap down opening would take Nifty closer to immediate support of 8430 and had advised traders to cut trading longs if Nifty breaks the low made in first hour.
The benchmark, after breaking the first hour low of 8417, plunged all the way to 8341 before closing at 8363.
8335 is the 61.8% retracement level of the recent 8195-8561 rally and therefore is the immediate support below which 34-DMA, placed at 8275, would be the next support.
Immediate hurdle on the hourly chart is placed around 8475, a crossover of which should be awaited before building fresh longs. Trading volumes should however be kept low at least until the outcome of Sunday's Euro Summit is known.
Tech major TCS will kickstart the April-June quarter earnings season today. The company is expected to report dollar revenue growth of 4.2% q-o-q at $4065 mn. Rupee revenues are expected to grow by 6.36% to Rs 25759 cr. EBIT margins are expected to fall to 25.64% from 27.21% due to wage hike and higher visa cost.