NIFTY CROSSES 8440 HURDLE; STAY LONG WITH THE STOP LOSS OF 8375 FOR TARGET OF 8561

NIFTY CROSSES 8440 HURDLE; STAY LONG WITH THE STOP LOSS OF 8375 FOR TARGET OF 8561

WORLD MARKETS                             

US indices soared 1.1%-1.5% yesterday on news of a bailout agreement between Greece and its creditors.

European Council President Donald Tusk yesterday said that euro zone leaders reached a unanimous agreement with Greece after all-night talks in Brussels to move forward with a bailout loan for the cash-strapped nation, provided Athens implement tough reforms.

To receive this third bailout, Greece's parliament must pass the new rules in areas such as privatization, labor laws and pension reforms by Wednesday. The 86 billion euro ($95.2 billion) in funds would come over three years.

European markets gained 1%-2%.

Dollar index rose to 96.80 from 95.78 on Friday with the euro dipping below $1.10. The US 10-year Treasury yield was 2.44%. Nymex oil fell 54 cents to $52.20 a barrel.

AT HOME

After a rangebound trade in the morning session, benchmark indices spiked up in the noon trade on the back of positive news on Greece front and finally ended higher by 1.1%. Sensex soared 300 points to settle at 27961 while Nifty finished at 8460, up 99 points. BSE mid-cap and small-cap indices climbed 1.4% and 1.3% respectively. Except a 0.2% cut in BSE Capital Goods index, all the sectoral indices ended in green with IT and Teck indices leading the tally, rising 1.7% each.

FIIs net bought stocks and index futures worth Rs 528 cr and 15 cr respectively but net sold stock futures worth Rs 672 cr. DIIs were net sellers to the tune of Rs 172 cr.

Rupee depreciated 12 paise to end at 63.51/$.

Consumer price index based inflation for June jumped to a four-month high of 5.4%, primarily driven by higher than expected food inflation.

Government has decided to cap the subsidy payout on kerosene at Rs. 12 per litre but rates will not increase as upstream firms like ONGC will be asked to pay Rs. 5,000-6,000 crore to maintain retail prices at the current level.

OUTLOOK

Today morning Shanghai and Hang Seng are modestly lower, Nikkei is up nearly a percent and half,  other Asian markets are modestly higher and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that "immediate resistance on the hourly chart is placed around 8440, a crossover of which should be awaited for taking fresh longs".

Nifty surged 99 points to end at 8460, crossing the above mentioned hurdle and generating a buy on the hourly chart.

8561, the high made last week, would be the immediate target on the way up. Immediate support on the hourly chart is placed around 8375, with the stop loss of which trading longs should be held on to.

India's WPI for June will be released today. In May, the figure stood at -2.36%.