Monday, July 7, 2014

PRUDENT MORNING MANTRA - 07.07.2014

NIFTY STAGES SMART REBOUND TO CLOSE AT RECORD HIGH ON FRIDAY; STAY LONG WITH THE STOP LOSS OF 7660

WORLD MARKETS

US markets were shut on Friday on account of Independence Day.

European markets, except a flat FTSE, ended with cuts ranging from 0.2%-1.5%. A profit warning by Austria's Erste Bank pushed banking stocks lower.

ECB policymaker and president of the German Bundesbank, Jens Weidmann, warned later on Thursday that ECB stimulus policies could eventually lead to financial risks such as exorbitant gains in real estate markets.

For the week however, European markets gained between 0.7%-2% and US indices advanced 1.3%-2% with Dow closing above the 17000 mark for the first time.

International Monetary Fund chief Christine Lagarde warned over the weekend that the pace of global growth may be weaker than expected in the second half of the year due to weak investment. Lagarde also said she does not see a hard landing for China.

AT HOME

After falling nearly two third of a percent in the first half, benchmark indices saw a smart rebound in the second half to end higher by half a percent on Friday, marking a fresh all time high. Sensex gained 138 points to settle at 25962 while Nifty ended at 7752, up 38 points. BSE mid-cap and small-cap indices gained 0.6% and 0.8% respectively. BSE Oil & Gas and Realty indices climbed 1.7% and 1.1% respectively, becoming top gainer among the sectoral indices while Metal and Consumer Durable indices lost 0.9% and 0.4% respectively.

FIIs net bought stocks and index futures worth Rs 943 cr and 53 cr respectively but net sold stock futures worth Rs 756 cr. DIIs were net sellers to the tune of Rs 853 cr.

Rupee appreciated 1 paise to close at 59.72/$.

For the week, Sensex and Nifty gained 3.4% and 3.2% respectively.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 15 points higher opening for our market.

Ever since Nifty regained the higher-top higher-bottom formation last Monday by closing above 7589, we have been working with the target of 7800-7850. That continues to be the immediate target area on the way up.

7660, the low made on Friday, is the immediate support, with the stop loss of which trading longs should be held on to.


Budget session of the Parliament starts today. Railway budget will be presented tomorrow, Economic survey will be tabled on Wednesday and the Union budget will be presented on Thursday.

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