9475, 9530 ARE UPSIDE TARGETS; 9090 IMMEDIATE SUPPORT

9475, 9530 ARE UPSIDE TARGETS; 9090 IMMEDIATE SUPPORT

WORLD MARKETS

US indices climbed 0.8%-2.2% as optimism over the reopening of economies buoyed market sentiment. S&P 500 closed above 3000 while Dow finished north of 25,000, both scaling their highest close since March.

Meanwhile, US-China tensions continued to be in focus. U.S. Secretary of State Mike Pompeo told Congress that Hong Kong was no longer autonomous from China, raising questions over the special administrative region’s favorable trade relationship with the U.S. as well as opening up the possibility of sanctions on Chinese officials. Also, the House of Representatives passed legislation condemning China for the detention and torture of Uighur Muslims in the country’s western region of Xinjiang.

Brent crude fell $1.43, or 4%, to settle at $34.74 a barrel, while WTI crude settled $1.54, or 4.5%, lower at $32.81 per barrel as tensions between US-China escalated and as dobts were raised about Russia’s commitment to deep production cuts.

Main European markets rose 1.3%-1.8%. The European Commission unveiled plan for a 750 billion euro ($826.5 billion) recovery fund, as the region faces its worst economic crisis since the 1930s.

AT HOME

Sensex and Nifty soared 3.2% each, registering biggest gain since 17 April and 30th April respectively and closing at the highest level since 13th May. Sensex settled at 31605, up 996 points while Nifty added 285 points to finish at 9314. BSE mid-cap and small-cap indices however underperformed, rising just 0.5% and 0.3% respectively. Except 0.8% lower Healthcare index, all the BSE sectoral indices ended in green with Bankex leading the tally, up 7.3%, followed by 5.6% higher Finance index.

FIIs net sold stocks worth Rs 335 cr but net bought index futures and stock futures worth Rs 1664 cr and 912 cr respectively. DIIs were net buyers to the tune of Rs 2409 cr.

Rupee depreciated 5 paise to end at 75.71/$.

OUTLOOK

Today morning, Nikkei and Shanghai are up 2% and 0.8% respectively while Hang Seng is little changed. SGX Nifty is suggesting about 60 points higher start for our market.

In yesterday's report we had reiterated the view that 9178, the top made last week, continued to be immediate resistance, a crossover of which was required for a fresh upmove. We had also mentioned in our earlier reports that once 9178 is taken out, 9281-9351, the gap created by gap-down opening on 14th May, would be the next target/resistance zone to eye.

Nifty yesterday crossed 9178 hurdle and surged all the way to 9334 before closing at 9314, vindicating our view.

With yesteray's surge, Nifty has broken out of a trendline resistance adjoining recent tops on daily chart and has also crossed 20 as well as 34-DMAs. 9475, followed by 9530, which are 61.8% and 67% retracement levels of entire 9889-8806 fall, are the upside targets to eye.

9090 is the immediate support on the hourly chart, with the stop-loss of which, trading longs should be held on to.