NIFTY SET TO CHALLENGE 8243 HURDLE; US JOBS DATA IN FOCUS
US indices gained 0.3%-0.4% yesterday, with the S & P 500 closing at the highest level in seven months.
Ahead of Friday's non-farm payroll data, ADP data showed private sector added 173000 jobs in May, a touch below expectations for 175000 jobs. April report was revised up too 166000 from 156000.
US oil, after initially falling on the back of OPEC agreeing on no change in policy and output ceiling, turned higher after weekly crude oil inventories showed a draw of 1.4 million barrels and closed 16 cents or 0.33% higher at $49.17 a barrel. Brent rose 0.6% to $50.04 for its first settlement above $50 since November 3.
Dollar index was mildly higher.
European markets ended mixed with modest changes. ECB, at its monthly policy review, left key rates unchanged. The central bank raised its 2016 inflation forecast to 0.2% from 0.1% seen in March and kept its longer-term forecasts steady, with expectations of a 1.6% inflation rate in 2018, still short of its target of almost 2%. The bank now sees growth of 1.6% for 2016, up from a 1.4% forecast in March. It left its growth forecast for 2017 unchanged and trimmed its forecast for 2018 to 1.8%.
President Mario Draghi warned of downside risks related to the global economy and the so-called "Brexit" vote in the U.K.
After trading in a narrow range for better part of the day, benchmark indices spiked up post 2 O'clock to end with gains of half a percent to close at fresh 9-month high. Sensex added 129 points to settle at 26843 while Nifty finished at 8219, up 39 points. BSE mid-cap and small-cap indices gained 0.7% and 0.3% respectively. Except a 0.7% and 0.4% cut in BSE Consumer Durable and Healthcare indices respectively, all the sectoral indices ended in green with Metal index leading the tally, up 2%, followed by 0.9% gain in Bankex and Finance index each.
FIIs net bought stocks and stock futures worth Rs 522 cr and 83 cr respectively but net sold index futures worth Rs 159 cr. DIIs were net sellers to the tune of Rs 577 cr.
Rupee appreciated 15 paise to end at 67.29/$.
Indian Meteorological Department yesterday said the monsoon rains this year are expected to be above average at 106% of the long period average and that monsoon is expected to hit Indian coast in next 4-5 days.
China's May Caixin Services PMI has come in at 51.2, down from 51.8 in April.
Today morning, Shanghai is flat, Nikkei and Hang Seng are up about half a percent and SGX Nifty is suggesting about 20 points higher start for our market.
In yesterday's report we had reiterated the view that 8243, the 61.8% retracement level of the 9119-6825 fall, continues to be important hurdle to eye, upon decisive crossover of which 8336, the top made in October 2015, would be the next target to eye.
The benchmark gained 39 points to end at 8219 and a positive start today would take it closer to 8243 hurdle.
Immediate support on the hourly chart has moved up to 8130, which should serve as the fresh stop loss for trading longs.
Key data to watch out today would be the US May non-farm payroll, which will offer cues to whether the Federal Reserve will pull the trigger in June. Estimates are that the US economy added 164000 jobs with the unemployment rate at 4.9%.