INFRASTRUCTURE OUTPUT AT SIX-MONTH HIGH; AUTO SALES IN FOCUS

INFRASTRUCTURE OUTPUT AT SIX-MONTH HIGH; AUTO SALES IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 gained 0.1% and 0.3% respectively while Nasdaq climbed 0.6% yesterday.

Greece proposed a new, two-year bailout deal with the European Stability Mechanism. The new proposal is expected to be discussed by the Eurogroup of euro zone finance ministers today.

Meanwhile, the IMF yesterday confirmed Greece did not pay its 1.6 billion euro loan installment and the country can now only receive further IMF funding once the arrears are cleared.

In addition to Greece, markets are eyeing Puerto Rico, where another potential debt crisis is brewing. The commonwealth's Governor Alejandro Garcia Padilla late Monday said the island needs a restructuring plan for its $72 billion in debt.

Back in the US, the Chicago PMI missed expectations and came in below the key 50 level at 49.4. The consumer confidence index topped expectations with a 101.4 read for June. Earlier, the S&P/Case-Shiller home price index showed a 4.9% rise in April.

Dollar index gained half a percent to settle at 95.53. Nymex oil rose $1.14 or 2% to $59.47 a barrel. Gold fell $7.2 to #1178 an ounce.

European markets lost 0.5%-1.5%

AT HOME

After trading near zero line for better part of the day, benchmark indices surged in last hour of trade to end higher by about half a percent. Sensex settled at 27781, up 136 points while Nifty gained 50 points to finish at 8368. BSE mid-cap and small-cap indices climbed 1.3% and 1.1% respectively.

The last hour rebound was mainly on the back of unconfirmed reports that Greece was to return to the negotiating table with creditors.

Except a 0.8% and 0.3% cut in BSE IT and Teck indices respectively, all the sectoral indices ended in green with Healthcare and FMCG indices leading the tally, putting on 2.1% and 2% respectively.

FIIs net sold stocks worth Rs 551 cr but net bought index futures and stock futures worth Rs 353 cr and 180 cr respectively. DIIs were net buyers to the tune of Rs 581 cr.

Rupee appreciated 20 paise to end at 63.64/$.

India's infrastructure output, comprising of eight key industries, grew by 4.4% in May, the fastest pace in six months, versus a decline of 0.4% in April.

India's fiscal deficit during April-May touched 2086 bn rupees ($32.8 bn), or 37.5% of the target for the 2015/16 fiscal.

Oil marketing companies cut petrol and diesel prices by 31p/ltr and 71p/ltr respectively.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting about 10 points lower opening for our market.

In yesterday's report we had mentioned that a sustained trading above 8370 is required to generate a buy on the hourly chart.

The benchmark, after touching a high of 8378 closed at 8368.

However, couples of hurdles are waiting for Nifty in 8370-8490 band. The first one would be the trendline adjoining recent tops on the hourly chart placed around 8390, followed by the trendline adjoining recent tops on daily chart placed around 8420. That would be followed by 20-week moving averge placed at 8455 and 34-week moving average placed at 8470. And finally you have big hurdle of previous weekly top placed at 8490.

In light of the above observations and looming Greece referendum, trader would do well to keep trading volumes low and wait for the crossover of 8490 hurdle before taking a decisive bullish view on Nifty.

Auto companies will report June sales figures starting today.

Prime Minister Narendra Modi will launch the digital India project today, which aims to connect all gram panchayats by broadband internet, promote e-governance and transform India into a connected knowledge economy.