NEAR CRUCIAL HURDLES

NEAR CRUCIAL HURDLES

WORLD MARKETS                             

US indices gained 0.5%-0.8% yesterday on the back of better-than-expected economic data and optimism over Greek issue.

Greek Prime Minister Alexis Tsipras on Tuesday accepted lenders' conditions in a two-page letter originally sent to the heads of the European Commission that requested only minor revisions to their suggestions on pensions and tax reforms.

In a fresh statement issued yesterday, he said the country will go ahead with the referendum on Sunday and that it is not a determinant of whether or not Greece remains in the euro zone. He urged Greeks to vote "No" at the referendum.

The Eurogroup of regional finance ministers concluded a conference call yesterday on Greece's latest proposal. No other meeting is expected before Sunday's referendum.

Back in the US, ISM manufacturing topped expectations at 53.5, while construction spending rose 0.8 percent in May to a 6-1/2-year high.The ADP private sector employment report showed creation of 237,000 jobs, topping expectations of 218,000. On the flip side, the final June U.S. Manufacturing Purchasing Mangers' index fell to 53.6, its lowest since October 2013 and weekly mortgage applications fell 4.7% on the highest rates in 9 months.

Dollar index advanced nearly a percent to 96.31, with the euro at $1.105. US 10-year treasury yield held near 2.42%. Nymex oil fell $2.51 or 4.2% to $56.96 a barrel.

European markets climbed 1.4%-2.2%. Eurozone manufacturing Purchasing Managers' Index rose to 52.5 in June from 52.2 in May, touching a 14-month high.

AT HOME

Benchmark indices soared nearly a percent yesterday, with Sensex and Nifty closing at the highest level since 17th April and 22nd May respectively and extending the winning streak to third straight day. Sensex soared 240 points to settle at 28021 while Nifty finished at 8453, up 85 points.  BSE mid-cap and small-cap indices gained 1.3% and 1.4% respectively. Except a 0.4% cut in BSE FMCG index, all the sectoral indices ended in green with Capital Goods and Power indices leading the tally, putting on 1.7% and 1.6% respectively.

India's HSBC PMI eased to 51.3 in June from 52.6 in May.

FIIs net bought stocks, index futures and stock futures worth Rs 75 cr, 398 cr and 615 cr respectively. DIIs were net buyers to the tune of Rs 52 cr.

Rupee appreciated 4 paise to end at 63.605/$.

Eicher Motor reported 48% surge in June sales at 37341 units. Ashok Leyland reported 41% jump at 10461 units. TVS reported 8% uptick at 2.22 lk units. Tata Motors reported 6% growth at 40870 units. Those of Maruti went up by 1.8% to 1.15 lk units. M & M on the other hand saw a fall of 6% at 36134 units. Hero MotoCorp was flat at 5.42 lak.

Minister of State for Finance Jayant Sinha yesterday said that the government is drawing up a comprehensive package to help PSU Banks, as parts of efforts to nurse them back to health and improve the flow of credit to industry.

Top CEOs from India and abroad yesterday committed to invest Rs 4.5 lakh crore for the Modi government's ambitious 'Digital India' mission to provide telephony and fast internet for all, with more than half of the promised investments announced by Mukesh Ambani alone.

OUTLOOK

Today morning Nikkei is up more than a percent on the back of weaker yen which is trading around 123.38/$. Other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 20 points lower opening for our market.

In Tuesday's report we had mentioned that the immediate hurdle on the hourly chart is placed around 8370 a crossover of which would take the Nifty to big resistance area placed around 8470-8490.

The benchmark touched a high of 8482 yesterday before closing at 8453, achieving the target mentioned above.

As we have been mentioning, 8475 is were 34-week moving average is placed while 8490 is the immediate previous top on the weekly chart, which makes 8475-8490 an important resistance area. A weekly close above 8490 would also break the lower-top lower-bottom formation on the weekly chart, which will negate the bearish medium term outlook.

While long positions should be initiated only after the crossover of 8490, existing longs can be held with the stop loss of 8355, which is the immediate support on the hourly chart.

Key report to watch out today would be US nonfarm pyaroll report for June where addition of 230000 job is expected as against the figure of 280000 for May.