9710 CONTINUES TO BE IMPORTANT HURDLE; 9600 IMMEDIATE SUPPORT

9710 CONTINUES TO BE IMPORTANT HURDLE; 9600 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.4%-1% on Friday following better-than-expected nonfarm payrolls figures for the month of June.

A total of 222,000 new jobs were recorded last month compared to the 179,000 forecast. The unemployment rate ticked higher to 4.4% from 4.3%. Wage growth — which is viewed as a measure of inflation — rose by just 0.2%, however.

Treasury yield held higher after the report with 10-year around 2.39% and two-year, which is the more sensitive to changes in monetary policy, near 1.40%.

WTI crude plunged $1.29 or 2.8% to $44.23 a barrel after data showed U.S. production and rig counts rose last week just as OPEC exports hit a 2017 high, casting doubt over efforts by producers to curb global oversupply. Brent lost 3.1% to $46.64.

In Europe, FTSE and DAX ended modestly higher while France, Italy and Spain ended with modest cuts.

For the week, US indices gained 0.1%-0.3%. European markets added half a percent each. Asia was mixed with Shanghai up 0.8% while Nikkei and Hang Seng fell 0.5% and 1.6% respectively.  

AT HOME

Benchmark indices ended marginally in the red after trading in a narrow range. Sensex settled at 31361, down 7 points while Nifty lost 9 points to finish at 9666. BSE mid-cap index fell 0.04% but the small-cap index gained 0.3%. BSE Energy and Realty indices climbed 1.6% and 1.5% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.7% and 0.5% respectively.

For the week, Sensex and Nifty gained 1.4% and 1.5% respectively, with Nifty breaking 3-week losing streak and Sensex registering the highest ever weekly close. FIIs net sold stocks and index futures worth Rs 522 cr and 761 cr respectively but net bought stock futures worth Rs 192 cr. DIIs were net buyers to the tune of Rs 720 cr.

Rupee appreciated 18 paise to end at 64.60/$.

Sebi has put in place restrictions on foreign portfolio investors from issuing participatory notes where the underlying asset is a derivative. Now, participatory notes or Offshore Derivative Instruments (ODIs) where the derivative is underlying can be issued only for the purpose of hedging with respect to the equity shares held. Besides, the watchdog has said that existing positions on unchanged P-Note derivatives have to be liquidated by the end of December 2020.

OUTLOOK

China's June CPI has come in at 1.5%, matching expectations. PPI is up 5.5%.

Today morning, except a modestly lower Shanghai, other Asian markets are trading with gains of 0.4%-0.8% and SGX Nifty is suggesting a marginally lower start for our market.

As we have been mentioning, a decisive crossover of 9710, the top made in early June, is required for a fresh upmove. If that happens, 10000 would be the next big target to eye.

Meanwhile, 9600 is the immediate support, with the stop-loss of which trading longs should be held on to.