7700 CONTINUES TO BE DOWNSIDE TARGET/SUPPORT; 7900 IS THE IMMEDIATE HURDLE

7700 CONTINUES TO BE DOWNSIDE TARGET/SUPPORT; 7900 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.3%-0.6% but closed off the day low on Friday as healthcare stocks weighted and economic data disappointed.

Chicago PMI for April was 50.4, below expectations of 53.0 and March's 53.6 print. The final April read on consumer sentiment was 89.0. Personal spending rose 0.1% in March, while personal income rose 0.4%. The Fed's preferred inflation measure, the ex-food and energy personal consumption expenditures (PCE) price index, edged up 0.1% last month. In the 12 months through March, the core PCE rose 1.6% after advancing 1.7% in February.

Amazon.com reported earnings well above expectations on both the top and bottom line. LinkedIn's results also soared past expectations and the firm raised its full-year outlook. Chevron posted a greater-than-expected loss of 39 cents a share, while revenue beat expectations at $23.55 billion. Exxon Mobil reported quarterly earnings and revenue that beat expectations.

Nymex oil fell 11 cents or 0.24% to $45.92 a barrel.

European markets, weighed down by disappointing earnings, tumbled 1.3%-2.8%. Economic data was mixed. Euro zone GDP rose 0.6% quarter-on-quarter in the first three months of the year. Unemployment fell to 10.2% in March, down from 10.4%t recorded in February. And an initial inflation estimate showed the price of goods fell 0.2% this month.

Dollar index fell more than half a percent to its lowest since August 24, 2015. Euro hit its highest against the dollar since April 12. Yen strengthened to highest level since October 2014. Gold jumped more than 2% to $1290 an ounce to hit its highest in more than a year.

For the week, Dow and S & P 500 lost 1.3% each while Nasdaq lost 2.7%. European markets lost 1%-3.2%. In Asia Nikkei nosedived 5.2% while Hang Seng and Shanghai fell 1.9% and 0.7% respectively.

For the month of April Dow gained half a percent, extending the winning streak to third month. S & P 500 inched up 0.3% and Nasdaq rose 1.9%.  Dollar index posted a monthly loss of 1.6%, its first three-month losing streak since 2012. Against the yen, greenback lost 4.9%, its worst since October 2008. Gold climbed 4.4% for its first four-month win streak since the one ended August 2012. WTI crude soared 20% in April.

AT HOME

After falling about three fourth of a percent, benchmark indices recouped all the losses in the late noon trade to end flat. Sensex settled at 25607, up 4 points while Nifty added 3 points to finish at 7850. BSE mid-cap index gained 0.2% while the small-cap index fell 0.05%. BSE Realty and Power indices gained 1.2% 0.9% respectively, becoming top gainers among the sectoral indices while Telecom index tumbled 2.2%, becoming top loser, followed by 1% cut in Consumer Durable index.

FIIs net sold stocks, index futures and stock futures worth Rs 205 cr, 268 cr and 609 cr respectively. DIIs were net buyers to the tune of Rs 28 cr.

Rupee appreciated 19 paise to end at 66.33/$.

Oil marketing companies hiked petrol and diesel price by Rs 1.06/litre and Rs 2.94/litre.

OUTLOOK

Data released yesterday showed that China's official PMI rose to 50.1 in April, easing from March's 50.2 and against the expectation of 50.4 read.

Today morning Nikkei, after taking an off on Friday, has opened with deep cuts of more than three percent. Other Asian markets are trading with cuts of 0.25%-1.5% and SGX Nifty is suggesting about 50 points lower opening for our market.

In Friday's report we had mentioned that after Thursday's fall Nifty is back in the sell mode on the hourly chart and that 7822, the bottom made on Tuesday, is the immediate support, upon sustained trading below which 34-DMA, placed around 7700, would be the next target to eye.

Nifty, after touching a low of 7789, rebounded in late noon trade to end at 7850 but is set to open close to 7800 today.

34-DMA, placed around 7700, continues to be the downside target as well as the support to eye. 7900 is the immediate resistance on the hourly chart, with the stop loss of which short positions can be held on to.

HDFC will report its quarterly earnings today.

Auto companies will report April sales data.