15735 BELOW 15903; 16400 IS IMMEDIATE HURDLE

 

15735 BELOW 15903; 16400 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices nosedived 2.7%-3.5% on Friday after May inflation report showed a faster-than-expected rise in prices and consumer sentiment hit a record low.

 

Consumer prices rose 8.6% y-o-y in May, the most since 1981. Core inflation, which excludes volatile food and energy prices, increased 6.0%, after April's 6.2% increase, but was higher than estimate. The University of Michigan consumer sentiment reading fell to a record low, as inflation weighs on American households.

 

US 10-year treasury yield jumped 11 bps to 3.159%. Dollar index rose 0.8% to 104.19. Spot gold rose 1.4% to $1,873.58 per ounce.

 

Brent crude fell $1.19, or 1%, to $121.88 a barrel and WTI crude fell $1, or 0.8%, to $120.34 a barrel.

 

European markets tumbled 2.1%-5.2% with Italy leading the losses.

 

For the week, Dow fell 4.6% for its 10th down week in the past 11. The S&P 500 tumbled 5.1% for its worst weekly performance since January. Nasdaq Composite lost 3.5%.

 

AT HOME

 

Sensex and Nifty nosedived 1.8% and 1.7% respectively, suffering the worst cut after 19^th May, closing in red for the fifth time in last six sessions and also closing at the lowest level after 26th May. Sensex settled at 54303, down 1016 points while Nifty lost 276 points to finish at 16201. Nifty mid-cap and small-cap indices fell 0.8% and 1.1% respectively. Except 0.1% higher Telecom index, all the BSE sectoral indices ended in red, with Oil & Gas and IT indices being the top losers, down 2.1% each.

 

FIIs net sold stocks, index futures and stock futures worth Rs 3974 cr, 1729 cr and 3461 cr respectively. DIIs were net buyers to the tune of Rs 2831 cr.

 

Rupee depreciated 8 paise to end at 77.84/$.

 

For the week, Sensex and Nifty tumbled 2.6% and 2.3% respectively, snapping 3-week winning streak.

 

April IIP hit an 8-month high of 7.1%, sharply up from 1.9% in March.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.5%-2.8% and SGX Nifty is suggesting nearly 300 points lower start for our market.

 

In Friday's report we had said that 16243, the low made Thursday, was the immediate support, upon breach of which, 16140 and 15960, the 61.8% and 78.6% retracement levels of the recent 15735-16794 upmove, would be the next downside levels to eye.

 

Nifty broke 16243 and touched a low of 16172 before closing at 16201. The benchmark is set to open below 16000 today.

 

15903, the low made on 26th May, would be the immediate support to eye after today's big gap-down. If that gives way, 15735, the bottom made in May, would be the important level to eye; 16400 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 33660, the 78.6% retracement level of the 33000-36083 upmove, is the immediate support, below which, 33000 would be the next downside level to eye; 34900-35000 is the immediate resistance zone.