9470 IS THE IMMEDIATE SUPPORT; 9615 NEAREST HURDLE
US indices surged 0.7%-1.4% yesterday with the S & P 500 posting its biggest 1-day gain in 2 months as bank stocks surged and technology stocks rebounded from Tuesday's sell-off.
Bank stocks climbed ahead of the release of the Federal Reserve's stress test results where several big banks were expected to come out with substantial increases in return to shareholders.
Also contributing gains were reports that the European Central Bank tried to walk back hawkish remarks made by ECB President Mario Draghi a day earlier. The euro came off session highs following the news.
US mortgage applications fell 6% last week, while pending home sales fell for the third straight month in May.
European markets, except a 1.2% higher Italy, lost 0.2%-0.6%
Back in the US, bank stocks rose further in extended trading after results of stress test showed the Fed had approved the capital return plans of all 34 banks.
Sensex and Nifty lost 0.4% and 0.2% respectively to close at fresh one-month low. Sensex lost 124 points to settle at 30834 while Nifty finished at 9491, down 20 points. BSE mid-cap and small-cap indices however gained 0.2% and 0.1% respectively. BSE Energy and Consumer Durable indices tumbled 1.4% and 1.2% respectively, becoming top losers among the sectoral indices while Metal and Telecom indices were the top gainers, up 1.6% and 1.1% respectively.
FIIs net sold stocks and index futures worth Rs 469 cr and 902 cr respectively but net bought stock futures worth Rs 795 cr. DIIs were net buyers to the tune of Rs 169 cr.
Rupee depreciated 3 paise to end at 64.55/$.
Union Cabinet yesterday approved setting up a committee to explore various options including strategic divestment of the loss-making Air India and its five subsidiaries. The committee will also study and suggest ways to treat the unsustainable debt of Air India; hiving off certain assets to a shell company and demerger and strategic divestment of the airline’s profit-making subsidiaries.
Cabinet also approved the recommendations put up by the Finance Secretary Ashok Lavasa-led committee in April on HRA and other allowances effective which will have combined additional financial impact of around Rs 30,748 crore a year.
Today morning Asian markets are trading with gains of upto 0.9% and SGX Nifty is suggesting about 30 points higher start for our market.
After Nifty broke the 9560 support, we had given downside target of 9470-9420. Nifty, on Tuesday touched a low of 9473 and retested this level yesterday before closing at 9491 and is set to open higher today.
9473, where a double bottom as well as the trendline support adjoining bottoms made in May is placed, is the immediate support to eye. 9420 would be the next downside target below 9473.
9615, the top made on Tuesday, continues to be immediate hurdle, a crossover of which is required for a fresh upmove. 9710 would be the next big hurdle above 9615.