NIFTY CONTINUES TO BE ON A WEAK WICKET; US JOBS DATA IN FOCUS

NIFTY CONTINUES TO BE ON A WEAK WICKET; US JOBS DATA IN FOCUS

WORLD MARKETS                             

US indices plunged about nine tenth of a percent yesterday as recent volatility in bonds and lack of resolution on Greece kept investors on edge ahead of Friday's employment report.

Weekly jobless claims came in at 276000, below expectations and last week's 282000. US non-farm productivity fell at 3.1% in first quarter, down sharply from the previously reported 1.9%.

After touching the new high for the year at 2.40%, 10-year Treasury yields cooled-off to 2.30%. German Bund yield soared to just shy of 1% before cooling off to 0.82%.

Nymex oil fell $1.64 or 2.75% to $58 a barrel. Gold fell $10 to $1175 an ounce.

Key European markets fell 0.7%-1.3%. Greece tumbled 3%.

IMF yesterday said that Greece will bundle its four debt payments to the IMF due this month into a single payment now due on June 30.

Greece's EU/IMF lenders have asked Athens to commit to sell off state assets, enforce pension cuts and press on with labor reforms. Eurogroup chairman said that the gap between Greece and its lenders narrowed after discussions this week and that Athens is expected to present alternatives to lenders' proposals within days.

Earlier Shanghai recovered from a 5% plunge to end modestly higher.

AT HOME

After falling nearly a percent, benchmark indices saw a sharp rebound in last hour or so to end little changed. Sensex settled at 26813, down 24 points while Nifty lost 4 points to finish at 8131. BSE mid-cap index closed 0.2% higher while the small-cap index lost 0.04%. BSE Realty and Capital Goods indices gained 0.8% and 0.6% respectively, becoming top gainers among the sectoral indices while Metal and Healthcare indices were the top losers, giving away 1.1% and 0.8% respectively.

FIIs net bought stocks and stock futures worth Rs 512 cr and 197 cr respectively while net sold index futures worth Rs 30 lacs. DIIs were net buyers to the tune of Rs 772 cr.

Rupee depreciated 10 paise to end at 64/$.

After successfully concluding the first two rounds of coal block auctions earlier this year that netted the government over Rs 3.35 lakh crore, the government today said it would conduct the third round from August 11-17, and which will complete on August 31.

As many as 10 mines, with total extractable reserves of 356 million tonne, will be put up for auction in this round, all for the unregulated (steel, cement, sponge) sector.

OUTLOOK

Today morning, Shanghai is up more than a percent, other Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 40 points lower opening for our market.

In yesterday's report we had mentioned that the lower band of bollinger on daily chart placed around 8080 is the immediate support below which 7997, the bottom made would be the crucial support to eye.

Nifty, after touching a low of 8057, rebounded smartly to end at 8131 in yesterday's trade.

7997 continues to be crucial support to eye a close below which would mark a fresh breakdown on the weekly chart and can eventually take Nifty to around 7640, where the 20-month moving average is placed. On the way up, 8270 continues to be immediate hurdle, a crossover of which should be awaited before taking a bullish view.

Key report to watch out today would be US non-farm payroll for May where addition of 225000 jobs is expected.