NIFTY HOLDS 7770 SUPPORT BY THE SKIN OF IT’S TEETH

NIFTY HOLDS 7770 SUPPORT BY THE SKIN OF IT’S TEETH

WORLD MARKETS                             

US indices ended off the day low but still lower by 0.4%-0.6%, amidst a stream of hawkish commentary from U.S. Federal Reserve officials.

New York Fed President William Dudley yesterday said that June was definitely a live meeting and that he was quite pleased market expectations for the probability of a June or July rate hike had moved up. Also, Richmond Fed President Jeffrey Lacker said that he was comfortable with four Fed rate hikes in 2016.

WTI oil, after falling nearly 4%, recouped all the losses to end just 3 cents lower at $48.16 a barrel.

US weekly jobless claims declined to 278,000, after three weeks of increases. The May Philly Fed index came in at minus 1.8.

Dollar index, after climbing to 95.50, its highest since late March, cooled-off to close at 95.30. Gold tumbled $20 to $1255 an ounce.

European markets tumbled 0.8%-1.8%

AT HOME

Benchmark indices nosedived more than a percent yesterday, suffering the largest daily fall since 28th April and closing at the lowest level since 6th May. Sensex lost 305 points to settle at 25400 while Nifty finished at 7783, down 87 points. BSE mid-cap and small-cap indices lost 1.1% and 1% respectively. All the BSE sectoral indices ended in red with Capital Goods and FMCG indices leading the tally, down 2.4% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 765 cr and 293 cr respectively but net bought stock futures worth Rs 427 cr. DIIs were net bought stocks worth Rs 1484 cr.

Rupee depreciated 39 paise to end at 67.36/$.

Trinmool Congress and AIADMK retained West Bengal and Tamil Nadu respectively in the assembly elections held recently. However, there was no such luck for Congress which lost Assam and Kerala to BJP and Left respectively.

Lupin reported better-than-expected 47.5% growth in Jan-March quarter net profit at Rs 807 cr. Revenue rose 36% to Rs 4181 cr. Operating profit shot up 73% to Rs 1367 cr and margin expanded by 710 bps to 32.7%.

Acting upon recommendations of the Supreme Court-appointed Special Investigation Team on black money, SEBI yesterday tightened due diligence requirement for issuance and transfer of p-notes by making it mandatory for all end-users of these overseas instruments to follow anti-money laundering law in India and asked their issuers to report any suspected breach immediately. Presently, the ODI issuers follow the KYC/AML norms of either the jurisdiction of the end beneficial owner or of the jurisdiction of the ODI issuer. In order to bring about an uniformity in the KYC/AML norms, it has been decided that Indian norms will now be applicable to all ODI issuers. These norms will be the same as that applicable for all other domestic investors. Also, ODI Issuers will be required to identify and verify the beneficial owners in the subscriber entities, who hold in excess of the applicable threshold -- 25 per cent in case of a company and 15 per cent in case of partnership firms, trusts or unincorporated bodies.

OUTLOOK

Today morning, except a modestly lower Shanghai, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 10 points higher opening for our market.

For past couple of sessions, we have been mentioning that 7770-7780 is the immediate support on the daily chart, a breach of which would also generate a sell on the hourly chart and can take Nifty to 7678, the bottom made in early May.

The benchmark plunged to 7767 yesterday but because of averaging, closed at 7783, holding the 7770 support by the skin of its teeth.

7770 continues to be immediate support a sustained trading below which should be awaited before initiating short positions.

ITC will report its quarterly earnings today.