NIFTY BREAKS 10630 SUPPORT; STAY SHORT WITH THE STOP-LOSS OF 10710

NIFTY BREAKS 10630 SUPPORT; STAY SHORT WITH THE STOP-LOSS OF 10710

WORLD MARKETS

US indices gained 1.3%-1.7% on Friday, digesting a mixed payroll data, as apple hit a record high to lead the technology sector higher.

Apple soared 4% after Warren Buffett revealed that he bought 75 million shares of the company during the first quarter, adding to Berkshire Hathway's already massive stake in the tech giant.

US economy added 164,000 jobs in the month of April, lower than the 195,000 expected. Average hourly earnings growth also missed, rising only 0.15% against expectations of a 0.2% gain. Unemployment rate fell to 3.9%, an 18-year low.

At the end of two-day meeting, US and China agreed to continue trade talks in future.

WTI crude rose $1.29, or 1.9% to $69.72 per barrel, the highest level since Nov. 26, 2014 and Brent rose to $74.90 per barrel, up $1.28, or 1.7% as global supplies remained tight and concerns over possible new U.S. sanctions against Iran.

European markets gained 0.3%-1%.

For the week, Dow and S & P 500 lost 0.2% each but Nasdaq gained 1.3%. European markets gained 0.6%-1.9%. In Asia, Hang Seng tumbled 1.2%, Nikkei was flat while Shaghai rose 0.3%.

AT HOME

Benchmark indices fell half a percent on the last day of the week, extending the losing streak to third consecutive day. Sensex fell 188 points to settle at 34915 while Nifty finished at 10618, down 61 points. BSE mid-cap and small-cap indices fell 0.4% and 0.2% respectively. Except a 1.2% lower Consumer Durable index, all the BSE sectoral indices ended in red, with Telecom and Auto indices leading the losses, down 1.2% and 1.1% respectively.

FIIs net sold socks, index futures and stock futures worth Rs 1628 cr, 493 cr and 255 cr respectively. DIIs were net buyers to the tune of Rs 1084 cr.

Rupee depreciated 22 paise to end at 66.86/$.

India's Nikkei/IHS services PMI rose to a three-month high at 51.4 in April from March's 50.3. Composite PMI rose to 51.9 from 50.8.

OUTLOOK

Today morning, Nikkei is down about half a percent, Hang Seng is little changed and Shanghai is up about 0.3%. SGX Nifty is suggesting a flattish start for our market.

Readers would recall that we had turned our view positive since Nifty crossed 10150 hurdle in late March and had been advising holding on to long positions with a trailing stop-loss. On last count, we had given target of 10770, which is the two-third retracement level of the entire 11171-9951 fall. Nifty, after achieving this target last week, slipped to end the week at 10618.

On Friday, we had reiterated that 10650-10630 is the immediate support zone, a breach of which would generate a "Sell" on the hourly chart and would pave the way for further correction.

Now that this support has been breached, next support to eye is around 10515, around which lot of consolidation was seen towards end of April.

Meanwhile, immediate resistance on the hourly chart is placed around 10710, with the stop-loss of which, trading shorts should be held on to.

ICICI will report its quarterly earnings today. Results are expected to be weak and slippages are expected to be elevated. Management commentary on stressed loans would be keenly watched.