Wednesday, June 29, 2016



WORLD MARKETS                             

US indices soared 1.6%-2.1% yesterday, posting their best gains since March 1.

Energy was the top gainer as US oil rose $1.52 or 3.3% to $47.85 a barrel.

Dollar index eased to 96.06 from 96.36. Pound recovered to $1.3351 from $1.3220 the previous day. Gold fell $7 to $1318 an ounce.

In US economic news, the final revision to first-quarter GDP edged up to 1.1%. The Conference Board's June consumer confidence index came in at 98.0, its highest since October, versus 92.4 in May.

European markets climbed 1.9%-3.3%. Banks rebounded after a two-day sell-off.

After the Brexit vote, the Conservative party in UK faces a question mark over who will replace Cameron, while Labour leader Jeremy Corbyn lost a non-binding no confidence vote within his own party. UK government has yet to trigger Article 50, which would begin negotiations for an exit. Outgoing U.K. Prime Minister David Cameron said he wanted a "constructive" divorce from the EU on arrival in Brussels on Tuesday for a European summit.

ECB President Draghi said central banks around the world need to coordinate on monetary policy in order to combat shared challenges but they also need to act to prevent "monetary policy spillovers."


After trading in a narrow range, benchmark indices spike up post the opening of European markets and ended higher by four tenth of a percent. Sensex added 122 points to settle at 26525 while Nifty finished at 8128, up 33 points. BSE mid-cap and small-cap indices rose 0.5% and 0.8% respectively. BSE Telecom and FMCG indices soared 2.3% and 1.8% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.9% and 0.5% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 190 cr, 792 cr and 309 cr respectively. DIIs were net sellers to the tune of Rs 243 cr.

Rupee depreciated 1 paise to end at 67.95/$


Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had reiterated the view that 8150, the 61.8% retracement level of the recent 8286-7927 fall, is the immediate hurdle, a sustained trading above which is required for the further upmove. The benchmark, after touching a high of 8146, eased to close at 8128.

A positive start today would again take the benchmark closer to 8150 mark.  Also you have the upper level of the gap created by the gap down opening on Friday placed at 8188. This makes 8150-8188 a potential resistance area. Above 8188, one would again look at the big 8295 hurdle which has been the ceiling since early June.

We have been advising keep trading volumes low in Nifty and look for stock specific opportunities till the former makes a fresh directional move and that continues to be the view.

Union Cabinet will meet today to approve new model shops bill, 7th Pay Commission proposal and decide dates of the monsoon session of the Parliament.

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