NIFTY REBOUNDS AFTER HOLDING 8064 SUPPORT; FED IN FOCUS

NIFTY REBOUNDS AFTER HOLDING 8064 SUPPORT; FED IN FOCUS

WORLD MARKETS                             

US indices ended well-off the session low with cuts of 0.1%-0.3% yesterday, amid decline in oil and looking forward to the outcome of Fed meeting.

US Treasury yields, after touching their lowest since mid-February, recovered with 10-yearyield near 1.62% and the 2-year yield near 0.72%. Earlier, the German 10-year bund yield fell into negative territory for the first time to hit a low of minus 0.034%. The U.K. 10-year gilt yield hit a fresh record low of 1.115%. The Japanese 10-year yield hit a record low of negative 0.168%.

US oill fell 39 cents or 0.8% to $48.49 a barrel after data from the American Petroleum Institute showed U.S. crude inventories rose by 1.2 million barrels in the week to June 10 to 536.7 million, compared with expectations for a decrease of 2.3 million barrels. Brent fell 52 cents to $49.83.

US retail sales rose a more-than-expected 0.5% in May. Import prices rose 1.4%, their largest gain in more than four years, while export prices jumped 1.1% in May. Business inventories rose 0.1% in April.

Dollar index gained about 0.6%. 

European markets tumbled 1.4%-2.3%.

AT HOME

After falling about half a percent, benchmark indices saw a sudden surge in the late noon trade to recoup all the losses and end flat. Sensex settled at 26396, down 1 point while Nifty lost 2 points to finish at 8109. BSE mid-cap and small-cap indices gained 0.2% and 0.5% respectively. BSE Realty index gained 0.8%, becoming top gainer among the sectoral indices, followed by half a percent rise in Healthcare and Industrial indices. Oil & Gas and Energy indices lost half a percent each.

FIIs net sold stocks, index futures and stock futures worth Rs 113 cr, 1881 cr and 174 cr respectively. DIIs were net sellers to the tune of Rs 32 cr.

Rupee depreciated 13 paise to end at 67.26/$.

In the meeting of state finance ministers held yesterday, states unanimously backed GST and agreed that the ceiling rate should not be prescribed in the Constitution Amendment Bill that is awaiting a Rajya Sabha nod. There will be meeting again in July to discuss issues linked to the revenue neutral rate under GST and the issue of dual control.

OUTLOOK

MSCI yesterday said it would delay inclusion of mainland-traded Chinese A shares in its key emerging market index, after international institutional investors indicated that they would like to see further improvements in accessibility to the market. MSCI said that it would monitor the implementation of the recently announced policy changes and will seek feedback from market participants.

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that 8064, the low made on Monday, is the immediate support, upon breach of which 8000 would be the next major target to eye. The benchmark, after touching a low of 8069, rebounded to close at 8109.

8064 continues to be immediate support. 8216 continues to be immediate resistance on the hourly chart.

Fed, at the end of its two day meet, is expected to leave interest rates unchanged following gloomy jobs data and rising concerns over the possibility of a Brexit. Market is also expecting dovish comments from the Fed chair Yellen.