9710-9590 CONTINUES TO BE IMMEDIATE RANGE; FED IN FOCUS

9710-9590 CONTINUES TO BE IMMEDIATE RANGE; FED IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 gained 0.4% each while Nasdaq climbed 0.7% as technology stocks bounced back from their biggest two-day decline since December. Dow and S & P 500 both posted a record close.

U.S. producer prices remained unchanged last month. National Federation of Independent Business' (NFIB) small business optimism index came in unchanged at 104.5 for May.

European markets, except a 0.2% lower FTSE, gained 0.4%-0.8%. Italian banks were higher after the country's economy minister said a deal to rescue two Italian banks is close. U.K. inflation reached 2.9% y-o-y in May - a four-year high.

WTI crude rose 38 cents to $46.46 and Brent rose 36 cents to $48.65 after Saudi Arabia vowed to reduce exports and OPEC reported an increase in its production for May.

AT HOME

After rising about four tenth of a percent benchmark indices tumbled in the late noon trade to end flat to marginally lower. Sensex settled at 31103, up 8 points while Nifty lost 10 points to finish at 9607. BSE mid-cap index ended flat while small-cap index gained 0.4%. BSE Power and Realty indices gained 0.8% each, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 1% and 0.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 312 cr, 300 cr and 121 cr respectively. DIIs were net buyers to the tune of Rs 305 cr.

Rupee appreciated 11 paise to end at 64.33/$.

RBI yesterday said it has identified 12 accounts of corporate borrowers who owe over Rs 5,000 crore each — and overall involve an amount of close to Rs 175,000 crore — for insolvency proceedings under the newly enacted Insolvency and Bankruptcy Code 2016 (IBC).

OUTLOOK

Today morning, except a modestly lower Shanghai, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 15 points higher start for our market.

As we have been mentioning, after hitting 9700-9725 target area, Nifty has been in a consolidation mode for couple of sessions and 9710-9590 are the boundaries of this consolidation phase, a breach of which, on either side, is required for taking a fresh directional view. Above 9710, 9820 would be the next upside target. On the way down, upon breach of 9590, 34-DMA, placed around 9490, would be the next downside target.

US Fed, at the end of it's two-day meeting is widely expect to raise interest rates by a quarter point. Markets will also look for clues about how the Fed plans to unwind its massive $4.5 trillion balance sheet.