STAY LONG WITH THE STOP-LOSS OF 10640

STAY LONG WITH THE STOP-LOSS OF 10640

WORLD MARKETS

US indices soared 0.9%-1.5% on Friday on the back of a stronger-than-expected jobs report.

The U.S. economy added 223,000 jobs in May, much higher than the expected 188,000 figure. Average hourly earnings rose 0.3% last month while the unemployment rate ticked down to 3.8%.

Treasury yields jumped on the report, with the benchmark 10-year yield trading at 2.89% and the two-year yield rising to 2.47%.

European markets gained 0.3%-1.8% after Italian parties averted the prospect of a snap election and Spain's leader was ousted and replaced.

For the week, Dow fell -0.5% while S & P 500 and Nasdaq gained 0.5% and 1.6% respectively. Main European markets fell 0.4%-1.6%. In Asia, Nikkei and Shanghai fell 1.2% and 2.1% respectively while Hnag Seng was off 0.3%.

U.S.-China trade talks yielded no major breakthroughs over the weekend. China threatened that previous trade agreements negotiated by the countries "will not take effect" if the Trump administration goes ahead with a planned tariff increase.

AT HOME

After a positive start, benchmark indices saw a sustained downward move through the session to end with cuts of nearly a third of a percent. Sensex lost 95 points to settle at 35227 while Nifty finished at 10696, down 40 points. BSE mid-cap and small-cap indices nosedived 1% and 1.6% respectively. BSE Power and Utilities indices tumbled 1.9% and 1.7% respectively, becoming top losers among the sectoral indices while Auto and Telecom indices were the top gainers, up 0.7% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 203 cr and 215 cr respectively but net bought stock futures worth Rs 153 cr. DIIs were net buyers to the tune of Rs 338 cr.

Rupee appreciated 35 paise to end at 67.06/$, the strongest level in a month.

India's Nikkei May manufacturing PMI came in at 51.2, down from 51.6 in the previous month.

Revenue collection from Goods and Services Tax (GST) declined to Rs 94,016 cr in May from the Rs 1.03 lakh cr mop-up in April.

Maruti reported 26% growth in May sales at 1.72 lakh units. Eicher Motor reported 23% rise in Royal Enfield sales at 74697 units. Ashok Leyland sold 51% more vehicles at 13659 units. M & M's tractor sales were up 14% at 29330 units while auto sales were up 12% at 46849 units. TVS Motor posted 10% growth at 3.09 lakh units. Tata Motors May sales surged 58% to 54295 units.

OUTLOOK

Today morning, Nikkei and Hang Seng are up more than a percent, Shanghai is up 0.3% and SGX Nifty is suggesting about 45 points higher start for our market.

After Nifty took out the 10717 hurdle on Thursday, we had given an upside target of 10875 and had asked holding on to long positions with the stop-loss of 10640.

Nifty, on Friday, fell 40 points to settle at 10696 but is set to open near 10750 today. 10875 continues to be upside target to eye. 10640 continues to be immediate support, with the stop-loss of which, trading longs should be held on to.