NIFTY CROSSES 8490 HURDLE; OIL PLUNGES 7%

NIFTY CROSSES 8490 HURDLE; OIL PLUNGES 7%

WORLD MARKETS                             

US indices ended lower by a third of a percent recovering from sharp opening losses, as markets shook off concerns of contagion from the Greece debt crisis.

Nymex oil plunged 7.7% in its second-worst day of the year to settle at $52.23 a barrel amid the Iran nuclear deal negotiations, the Greece debt drama and volatility in Chinese stocks. Brent fell 6.4% to 56.63/$.

After a meeting in Paris, German Chancellor Angela Merkel and French President Francois Hollande told Greece to come up with serious proposals in order to restart financial aid talks and avoid crashing out of the euro.

The European Central Bank said in a Dow Jones report that it will maintain emergency liquidity assistance for Greek banks. Euro zone leaders will meet at an emergency summit on Greece Today.

Back in the US, ISM's June service sector survey hit 56 in June, versus the 56.2 estimate. Markit's services PMI for June showed a final read of 54.8.

European markets fell between 0.8%-4% with Italy leading the tally.  Shares in French, Italian and Spanish banks took a hit following concerns over their exposure to the fallout from the Greek crisis.

Greek Finance Minister Yanis Varoufakis stepped down yesterday, saying in a blog post that he was was "made aware of a certain preference by some Eurogroup participants, and assorted 'partners', for my… 'absence' from its meetings." His sacrifice suggested leftist Prime Minister Alexis Tsipras is determined to try to reach a last-ditch compromise with European leaders.

AT HOME

After a gap down opening of more than a percent on the back of negative outcome from the Greece referendum, benchmark indices saw a sustained northward move through the session to end higher by four tenth of a percent. Sensex settled at 28209, up 116 points while Nifty rose 37 points to finish at 8522. BSE mid-cap and small-cap indices gained 0.8% and 1.1% respectively. BSE Healthcare and Oil & Gas indices gained the most among the sectoral indices, rising 1.7% and 1.1% respectively while Consumer Durable and Metal indices fell 0.9% and 0.6% respectively.

Rupee appreciated 4 paise to end at 63.395/$.

FIIs net bought stocks worth Rs 149 cr but net sold index futures and stock futures worth Rs 854 cr and 266 cr respectively. DIIs were net sellers to the tune of Rs 410 cr.

OUTLOOK

Today morning Nikkei is up more than a percent, Shanghai is down more than 2%, other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that we have been telling about three major hurdles on the weekly chart of Nifty viz. 20 and 34-week moving averages placed around 8470 and the previous top on weekly chart placed at 8490. While the first two of these hurdles were taken out on Friday itself, the final one was taken out yesterday as the benchmark closed at 8522. While the benchmark should close above 8490 on weekly basis for the confirmation of the same, looking at the formation on the daily chart, that seems very likely.

Nifty has confirmed breakout from a bullish inverse head & shoulder formation, the target of which comes to around 9000, which can materialize over next one and a half month or so. 8670, the 61.8% retracement level of the entire 9119-7940 fall, is the immediate target to eye.

Immediate support on the hourly chart is placed at 8430, with the stop loss of which trading longs should be held on to.