7770-7990 CONTINUES TO BE BROAD RANGE

7770-7990 CONTINUES TO BE BROAD RANGE

WORLD MARKETS                             

Dow and S & P 500 plunged 1% each and Nasdaq tumbled 1.25% on concerns over interest-rate hike ahead of release of the Fed meeting minutes on Wednesday, which market feared could be more hawkish than the statement that followed April's meeting

That fear was echoed in comments from San Francisco and Atlanta Fed Presidents who said the Fed could still raise rates two or three times this year.

The rate-sensitive 2-year Treasury yield rose to 0.827%, its highest since April 28.

In economic news, industrial production rose 0.7% in April. Capacity utilization was 75.4%. The Consumer Price Index rose 0.4% in April. Ex-food and energy, the index rose 0.2% last month, or 2.1% over the last 12 months as against a 2.2% rise in March. Housing starts rose 6.6% in April to a seasonally adjusted annual pace of 1.17 million units.

US oill rose 59 cents or 1.2% to $48.31 a barrel, its highest since October amid near-term supply outages, as a wildfire in Canada prompted evacuation of about 4,000 people from work camps outside the Fort McMurray oil hub.

European markets, except a 0.3% higher FTSE, fell 0.3%-1.3% with Italy leading the tally. Auto stocks were down the most. Italy's national statistics institute said the country's economy will grow by 1.1% this year, a cut in its earlier 1.4% forecast.

AT HOME

After gaining a percent through the session, benchmark indices gave away nearly half of the gains in last hour or so to end higher by little less than half a percent. Sensex settled at 25774, up 120 points while Nifty added 30 points to finish at 7891. BSE mid-cap and small-cap indices gained 0.1% and 0.2% respectively. BSE Oil & Gas and Realty indices gained 1.2% and 0.8% respectively, becoming top gainers among the sectoral indices while Power and Telecom indices were the top losers, giving away 0.4% and 0.3% respectively.

FIIs net sold stocks worth Rs 224 cr but net bought index futures and stock futures worth Rs 296 cr and 403 cr respectively. DIIs were net buyers to the tune of Rs 384 cr.

Rupee depreciated 7 paise to end at 66.87/$.

SBI yesterday said its board has given in-principle approval for the bank to discuss the possibility of acquiring its five associate banks along with Bhartiya Mahilla Bank.

OUTLOOK

Today morning Nikkei is up more than half a percent after data showed Japan’s Jan-March quarter GDP rose 0.4% on quarter, beating the forecast for 0.1% growth. Annualised GDP for the period grew 1.7% as against expectation of 0.2% uptick. Hang Seng and Shanghai are down nearly a percent and other Asian markets are trading mixed with modest changes. SGX Nifty is suggesting about 35 points lower opening for our market.

After Nifty staged a smart rebound from the 34-DMA support on Monday, in yesterday's report we had said that 7916, the top made last week, is the immediate hurdle above which 7992, the top made in April, would be the bigger resistance to eye.

The benchmark, after touching a high of 7940, plunged sharply in last hour or so to end at 7891.

7970-7990 continues to be major hurdle area, a decisive crossover of which is required for fresh upmove. If that happens, 8140, the 20-month moving average, would be the next target followed by 8300.

7770-7780 continues to be important support area on the way down.

Traders are advised to wait for the crossover of 7770-7990 range on either side for taking a fresh view.

PNB and JSW Steel will report their quarterly earnings today.