9700-9725 CONTINUES TO BE UPSIDE TARGET; 9550 IMMEDIATE SUPPORT

9700-9725 CONTINUES TO BE UPSIDE TARGET; 9550 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices climbed 0.6%-0.8% following stronger than expected private payroll data and ahead of key monthly jobs report.

Trump said that the U.S. would withdraw from the climate agreement, but wanted to negotiate for new arrangements that were more "fair" to the U.S. In response, European leaders, including German Chancellor Angela Merkel, said in a statement that the Paris agreement "cannot be renegotiated." The agreement aims to ensure global temperatures do not rise more than 2 degrees Celsius above pre-industrial levels.

Data from ADP showed private sector employment rose by 253,000 jobs compared to forecasts of 185,000. Weekly jobless claims came in at 248,000, above a forecast of 239,000. The ISM manufacturing index for May came in at 54.9, just below an estimate of 55.0. April construction spending fell 1.4% as against expectation of a gain of 0.5%.

Dollar index gained about 0.2% to 98.20.

European markets gained 0.3%-1%. Italian economy grew 0.5% in the first quarter, twice as fast as previously indicated by preliminary data posted last week.  House prices in the U.K. dropped for a third consecutive month in May for the first time since 2009.

AT HOME

Benchmark indices ended marginally in the red after trading in a narrow range, extending the losing streak to second day. Sensex fell 8 points to settle at 31138 while Nifty finished at 9616, down 5 points. BSE mid-cap and small-cap indices outperformed yet again, rising 0.5% and 1% respectively. BSE FMCG and Healthcare indices gained 1.2% each, becoming top gainers among the sectoral indices while Oil & Gas and Energy indices were the top losers, down 1.6% and 1.1% respectively.

FIIs net sold stocks and stock futures worth Rs 517 cr and 550 cr respectively but net bought index futures worth Rs 344 cr. DIIs were net buyers to the tune of Rs 172 cr.

Rupee appreciated 3 paise to end at 64.48/$.

India's May Nikkei Manufacturing PMI fell to 51.6 from 52.5 in April.

Eicher Motors reported 25% rise in Royal Enfield sales at 60696 units in May. Escorts total sales were up 29% at 6886 units. Maruti reported 11.3% growth at 1.37 lakh units. M & M posted 3% growth at 41895 units. Ashok Leyland however sold 8% less vehicles at 9071 units. SML Isuzu too saw 45.5% dip at 1052 units. Hero registered 8.7% growth at 8.34 lac units. TVS sold 2.82 lakh units, a growth of 15.7%.

OUTLOOK

Today morning, except a 0.3% lower Shanghai, other Asian markets are trading with gains of 0.2%-1.1% with Nikkei on the top and SGX Nifty is suggesting about 35 points higher start for our market.

At the risk of repeating, we have been gunning for target area of 9700-9725 after 9530 hurdle was taken out. The benchmark has touched a high of 9650 after that and was at 9616 yesterday.

9700-9725 continues to be immediate upside target. 9550 continues to be immediate support on the hourly chart, with the stop-loss of which trading longs should be held on to.

May non-farm payroll data, which will be released later in the day, is expected to show the U.S. economy added 185,000 jobs last month with unemployment rate steady at 4.4%.