STRONG US JOBS REPORT HIKES RATE HIKE CONCERNS; LOWEST WEEKLY CLOSE SINCE OCTOBER FOR NIFTY

STRONG US JOBS REPORT HIKES RATE HIKE CONCERNS; LOWEST WEEKLY CLOSE SINCE OCTOBER FOR NIFTY

WORLD MARKETS                             

Dow and S & P 500 lost 0.3% and 0.1% respectively while Nasdaq gained 0.2% on Friday as investors eyed developments in Greece and weighed a bond yield rally on a strong jobs report, which supports the case for a rate hike this year.

U.S. nonfarm payrolls totaled 280,000 in May, beating expectations, with unemployment slightly above forecasts at 5.5%. Average hourly earnings increased by 8 cents, also beating expectations. The labor force participation rate gained to 62.9%.

The US 10-year treasury yield hit an intraday high of 2.442%, its highest level since October 6. Dollar index inched up to 96.34 from 95.57 while the euro briefly fell below $1.11.

European markets lost 0.8%-2.1%. Apart from US jobs report, stocks were also pressured by Greece's delay of a debt payment to the IMF originally due Friday. The ATHEX Composite fell nearly 5%. 

After the local market close, Greece Prime Minister said Greece offered a realistic proposal that is in line with creditors' needs. He added that the country needs a deal that puts an end to "Grexit" talk and that doesn't combine austerity with debt relief.

Nymex oil rose $1.13 or 2% to $59.13 a barrel. OPEC decided to maintain output at 30 mn barrels per day for another six months, keeping a glut in markets. Gold lost $7 to $1168 an ounce.

For the week, Dow and S & P 500 lost 0.9% and 0.7% respectively while Nadaq ended flat. European markets lost 1.7%-2.8%.

AT HOME

After gaining nearly three fourth of a percent benchmark indices plunged nearly a percent from the top of the day in last half an hour to end a fifth of a percent lower on Friday. Sensex settled at 26768, down 45 points while Nifty lost 16 points to finish at 8115. BSE mid-cap and small-cap indices however gained 0.1% and 0.3% respectively. BSE Metal and FMCG indices gained the most among the sectoral indices, rising 1.8% and 1% respectively while Realty index and Bankex were the top losers, giving away 1.4% and 0.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 550 cr, 490 cr and 50 cr respectively. DIIs were net buyers to the tune of Rs 880 cr.

Rupee appreciated 25 paise to end at 63.74/$.

For the week, Sensex and Nifty lost 3.8% each and marked the lowest weekly close since the week ended 23rd October 2014.

Southwest Monsoon hit Kerala on Friday marking the start of the rainy season, four days after its normal onset date.

OUTLOOK

Data from Japan showed revised first-quarter GDP expanded at an annualized 3.9%, much higher than the preliminary reading of a 2.4%.

Barring a modestly higher Shanghai, other Asian markets are trading with cuts of upto half a percent and SGX Nifty is suggesting about 20 points lower opening for our market.

On Friday, after rising to 8191, Nifty slipped to end at 8115.  Near term outlook on Nifty continues to be negative. 8056, the bottom made last week, is the immediate support below which 7997, the bottom made in May, would be the major support to eye.

On the way up, 8270, the previous bottom on the daily chart, continues to be immediate hurdle on the way up with the stop loss of which trading shorts can be held on to.