RBI POLICY IN FOCUS

 

RBI POLICY IN FOCUS

 

WORLD MARKETS

 

Nasdaq plunged 1% while S & P 500 and Dow eased 0.4% and 0.1% respectively as gains in economic comeback plays were offset by declines in tech shares.

 

Economic data was strong. Data from ADP showed private jobs addition of 978,000 for May, a big jump from April’s 654,000 and the largest gain since June 2020. First-time claims for unemployment benefits for the week ended May 29 totaled 385,000, compared to estimate of 393,000 and marking the first print below 400,000 since the early days of the pandemic. a measure of U.S. services industry activity increased to a record high in May.

 

US 10-year Treasury yield rose about 4 basis points to 1.63%. The dollar index jumped 0.7%. Spot gold slipped 1.9% to $1,871.91 per ounce

 

Brent futures for August delivery fell 23 cents to $71.12 a barrel, while U.S. crude fell 14 cents to $68.69 per barrel.

 

In Europe, FTSE and CAC fell 0.6% and 0.2% respectively while DAX inched up 0.2%. Eurozone IHS Markit final composite PMI rose to 57.1 in May, up from 53.8 in April.

 

Earlier, China's Caixin/Markit services PMI for May came in at 55.1, lower than the reading of 56.3 in April.

 

AT HOME

 

Benchmark indices gained seven tenth of a percent, with both Nifty and Sensex notching record high on closing basis. Sensex added 383 points to settle at 52232 while Nifty finished at 15690, up 114 points. Nifty mid-cap and small-cap indices surged 0.9% and 1.2% respectively with the former hitting fresh record high and the later closing at the highest level since 15th January 2018.

All the BSE sectoral indices ended in green, with Consumer Durables and Realty indices leading the tally, up 4.4% and 4% respectively.

 

FIIs net bought stocks and index futures worth Rs 1079 cr and 560 cr respectively but net sold stock futures worth Rs 854 cr. DIIs were net sellers to the tune of Rs 279 cr.

 

Rupee appreciated 18 paise to end at 72.90/$.

 

ABFRL, Coromandel International, Indian Hotels and Metropolis Health will be introduced in F & O from July derivative series.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.2%-0.6% and SGX Nifty is suggesting around 30 points lower start for our market.

 

In yesterday's report we had said that 15850 would be the next upside target above Tuesday's high of 15661 and had advised trailing stop-loss in longs to 15460.

 

Nifty touched a high of 15705 before closing at 15690.

 

15850 continues to be next upside target to eye.

 

15460 continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

 

RBI's Monetary Policy Committee is expected to leave interest rate unchanged and maintain accommodative stance when it announces it’s decision at 10.00 am today. Markets will watch out for RBI's forecasts for GDP growth and inflation. Also will be watched any announcement on GSAP (Government Securities Acquisition Programme) and any comments on forbearance or relief for covid impacted sectors.

 

A key US non-farm payroll report will be released today and is expected to show 671,000 jobs were added in May, after April's dismal 266,000 figure.