NIFTY REBOUNDS FROM 34-DMA SUPPORT

NIFTY REBOUNDS FROM 34-DMA SUPPORT

WORLD MARKETS                             

Dow and S & P 500 climbed 1% each while Nasdaq surged 1.2% yesterday, supported by rise in energy stocks and Apple.

Energy stocks led the gains as US oil futures jumped 3.2% to $47.72 a barrel while Brent settled up 2.4% at $48.97, with both at their highest settlement since November 3. The gains came on growing Nigerian oil output disruptions and after long-time bear Goldman Sachs said the market shifted into deficit in May due to falling production, ending almost two years of oversupply.

Apple gained 3.7%, posting its best day since March 1 and contributed the most to gains in the Dow.

In economic news, the Empire State Manufacturing index for May came in at minus 9.02 versus positive 9.56 in April. Home builder confidence was unchanged for a fourth-straight month, at 58 in May

European markets closed mixed with modest changes.

AT HOME

After falling about half a percent in the morning trade, benchmark indices climbed more than a percent from the bottom of the day to end higher by six tenth of a percent. Sensex added 164 points to settle at 25653 while Nifty finished at 7861, up 46 points. BSE mid-cap and small-cap indices gained 0.3% and 0.1% respectively. BSE FMCG and Realty indices soared 1.6% and 1.5% respectively, becoming top gainers among sectoral indices while Oil & Gas and Capital Goods indices were the top losers, down 0.4% and 0.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 80 cr, 193 cr and 405 cr respectively. DIIs were net sellers to the tune of Rs 128 cr.

Rupee depreciated 3 paise to end at 66.80/$.

Exit polls for the four States and one Union territory for which elections concluded yesterday showed the DMK-Congress alliance heading to victory in Tamil Nadu, West Bengal Chief Minister Mamata Banerjee set for a repeat victory in that State, a Left Front government in Kerala, and a historic win for the NDA in Assam.

Oil marketing companies hiked petrol and diesel price by 83 paise/litre and Rs. 1.26/litre yesterday.

OUTLOOK

Today morning, Nikkei is up about 0.8%, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 15 points higher opening for our market.

In yesterday's report we had mentioned that "After Friday's fall, Nifty is back to immediate important support of 34-DMA, which has now moved up to around 7780" and that a sustained trading below 7780 would confirm a sell on the hourly chart and would pave the way for the further downside.

The benchmark, after touching a low of 7772, rebounded sharply to close at 7861, holding on to the 7780 support.

7770-7780 continues to be important support area. On the way up, 7916, the top made last week, is the immediate hurdle above which 7992, the top made in April, would be the bigger resistance to eye.

Bharat Forge, Motherson Sumi and Voltas will report their quarterly earnings today.