NIFTY TAKES OUT 8150-8188 HURDLE; STAY LONG WITH THE STOP LOSS OF 8125

NIFTY TAKES OUT 8150-8188 HURDLE; STAY LONG WITH THE STOP LOSS OF 8125

WORLD MARKETS                             

US indices soared 1.6%-1.9% yesterday, extending recovery to second straight day from post-Brexit plunge, supported by rising oil prices and realization that any change to the status quo in the European Union after the Brexit vote is unlikely to change in the short-term.

US oil soared $2.03 or 4.24% to $49.88 a barrel after EIA weekly crude inventories showed a greater-than-expected drawdown of 4.05 million barrels.

Dollar index eased for the second consecutive day to 95.65 from 96.04 the previous day. Pound too extended the recovery to second straight day to close at 1.3446/$ as against previous close of 1.3351/$. Gold gained $9 to $1327 an ounce.

In U.S. economic news, pending home sales fell a more-than-expected 3.7% in May from the prior month, for a 0.2% y-o-y decline and the first annual drop in two years. Consumer spending rose 0.4% in May. Personal income increased 0.2%.

European markets climbed 1.8%-3.6% with FTSE leading the tally and erasing all of the losses it made after the Brexit vote. Outgoing UK Prime Minister David Cameron addressed parliament saying that the U.K. economy faced turbulent times ahead, following its decision to leave the EU. He added that the new prime minister could begin negotiations with the bloc about its exit before the "Article 50" process is triggered.

AT HOME

After a positive start, benchmark indices saw significant addition to gains through the session to end higher by just under a percent, extending the winning streak to third straight day. Sensex soared 216 points to settle at 26740 while Nifty ended at 8204, up 76 points. BSE mid-cap and small-cap indices rose 1% and 13% respectively. Except a 0.1% lower FMCG index, all the sectoral indices closed in green with Realty index leading the tally, up 3.2%, followed by 1.9% rise in Utilities index.

FIIs net bought stocks, index futures and stock futures worth Rs 103 cr, 683 cr and 399 cr respectively. DIIs were net sellers to the tune of Rs 20 cr.

Rupee appreciated 27 paise to close at 67.68/$.

Union Cabinet yesterday cleared recommendations of 7th Pay Commission which will benefit over one crore government employees and pensioners. The Commission had recommended a 23.55% overall hike in salaries, allowances and pension involving an additional burden of Rs 1.02 lakh crore, or nearly 0.7% of GDP.

Cabinet also cleared the National Mineral Exploration Policy, paving the way for auction of 100 prospective mineral blocks. The policy will also provide a fillip to private sector participation and investment in exploration allowing them to carry out regional and detailed mineral exploration. According to the policy, mining companies will get a share of revenue from mineral exploration to host state.

Also approved was Model Shop & Establishment Act, which enables states to choose to keep shops and other such establishments open 24x7 all through the year. The move, which is likely to prove highly beneficial for restaurants, malls, movie theatres and other entertainment entities, among others will also help bring incremental tax income into the government’s kitty and generate employment.

The monsoon session of the Parliament will be held between July 18 to August 12.

OUTLOOK

Today morning, except a flat Shanghai, other Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 35 points higher start for our market.

Ever since Nifty started recovering post Brexit vote plunge, we were working with the resistance area of 8150-8188 where 8150 was the 61.8% retracement level of the recent 8286-7927 fall while 8188 was the upper level of the gap created by the gap down opening on Friday.

Nifty yesterday crossed both these hurdles decisively by closing at 8204. 8295, the top made in early June, is the next big hurdle to eye, a decisive crossover of which would open up the space for the further upside till 8655, which is the top made in July 2015.

Immediate support on the hourly chart is placed around 8215, with the stop loss which trading longs can be held on to.

STAY STOCK SPECIFIC AS NIFTY APPROACHING 8150-8188 RESISTANCE AREA

STAY STOCK SPECIFIC AS NIFTY APPROACHING 8150-8188 RESISTANCE AREA

WORLD MARKETS                             

US indices soared 1.6%-2.1% yesterday, posting their best gains since March 1.

Energy was the top gainer as US oil rose $1.52 or 3.3% to $47.85 a barrel.

Dollar index eased to 96.06 from 96.36. Pound recovered to $1.3351 from $1.3220 the previous day. Gold fell $7 to $1318 an ounce.

In US economic news, the final revision to first-quarter GDP edged up to 1.1%. The Conference Board's June consumer confidence index came in at 98.0, its highest since October, versus 92.4 in May.

European markets climbed 1.9%-3.3%. Banks rebounded after a two-day sell-off.

After the Brexit vote, the Conservative party in UK faces a question mark over who will replace Cameron, while Labour leader Jeremy Corbyn lost a non-binding no confidence vote within his own party. UK government has yet to trigger Article 50, which would begin negotiations for an exit. Outgoing U.K. Prime Minister David Cameron said he wanted a "constructive" divorce from the EU on arrival in Brussels on Tuesday for a European summit.

ECB President Draghi said central banks around the world need to coordinate on monetary policy in order to combat shared challenges but they also need to act to prevent "monetary policy spillovers."

AT HOME

After trading in a narrow range, benchmark indices spike up post the opening of European markets and ended higher by four tenth of a percent. Sensex added 122 points to settle at 26525 while Nifty finished at 8128, up 33 points. BSE mid-cap and small-cap indices rose 0.5% and 0.8% respectively. BSE Telecom and FMCG indices soared 2.3% and 1.8% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.9% and 0.5% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 190 cr, 792 cr and 309 cr respectively. DIIs were net sellers to the tune of Rs 243 cr.

Rupee depreciated 1 paise to end at 67.95/$

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had reiterated the view that 8150, the 61.8% retracement level of the recent 8286-7927 fall, is the immediate hurdle, a sustained trading above which is required for the further upmove. The benchmark, after touching a high of 8146, eased to close at 8128.

A positive start today would again take the benchmark closer to 8150 mark.  Also you have the upper level of the gap created by the gap down opening on Friday placed at 8188. This makes 8150-8188 a potential resistance area. Above 8188, one would again look at the big 8295 hurdle which has been the ceiling since early June.

We have been advising keep trading volumes low in Nifty and look for stock specific opportunities till the former makes a fresh directional move and that continues to be the view.

Union Cabinet will meet today to approve new model shops bill, 7th Pay Commission proposal and decide dates of the monsoon session of the Parliament.

BROADER MARKET MOVES AHEAD WHILE NIFTY CONSOLIDATES

BROADER MARKET MOVES AHEAD WHILE NIFTY CONSOLIDATES

WORLD MARKETS                             

US indices plunged 1.5%-2.4% with the Dow and S & P 500 closing at their lowest since mid-March and Nasdaq at its lowest since late February. Materials were the biggest laggards as dollar strengthened further.

Dollar index, after climbing more than 2% on Friday, gained further to close at 96.37, its highest in more than three months. Pound fell below Friday's lows to hit $1.3122, its lowest since September 1985. The People's Bank of China set the yuan's midpoint fix against the dollar at 6.6375, its weakest level since late 2010.

Rating agency S & P lowered UK's sovereign credit rating from "AAA" to "AA", citing last week's referendum.

US oil fell $1.31 or 2.8% to $46.33 a barrel.

In US economic news, the Markit flash services PMI for June came in unchanged from the prior month at 51.3.

European markets tumbled 1.8%-3.9%. Banking stocks were hit hard with Barclays down 17% and RBS off 15. Citigroup cut its price target and outlook on a number of Italian banking stocks, which have been under pressure because of their large portfolios of non-performing loans. Goldman Sachs lowered its U.K. and European car sales and production forecasts.

Earlier Asian markets closed mostly higher, with the Shanghai composite up 1.5% and Nikkei up 2.4%.

AT HOME

After Friday's massive volatility yesterday was a day of consolidation as benchmark indices ended little changed after trading in 1% range through the day. Sensex settled at 26403, up 5 points while Nify added 6 points to finish at 8095. BSE mid-cap and small-cap indices gained 0.8% and 1.5% respectively.  BSE Healthcare and Basic Materials indices climbed 2% and 1.9% respectively, becoming top gainers among the sectoral indices while IT and Teck indices tumbled 1.9% and 1.7% respectively, becoming top losers.

FIIs net sold stocks and index futures worth Rs 146 cr and 287 cr respectively but net bought stock futures worth Rs 61 cr. DIIs were net sellers to the tune of Rs 147 cr.

Rupee appreciated 1 paise to end at 67.95/$.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that 8150, the 61.8% retracement level of the recent 8286-7927 fall, is the immediate hurdle to eye while 7927, the low made on Friday, which also coincides with the 61.8% retracement level of the 7716-8295 upmove, is the immediate support. We had also advised trading light as far as Nifty is concerned till the volatility subsides.

The benchmark, after touching a high of 8121, eased to close flat at 8095 and is set to open lower today.

8150 continues to be immediate hurdle to eye a sustained trading above which would pave the way for the further upside till 8295. On the way down 7927 continues to be immediate support. We reiterate our advise of keeping trading volumes low till consolidation in this wide range is over and Nifty makes a fresh directional move.

8150-7927 ARE THE IMMEDIATE RESISTANCE-SUPPORT LEVELS

8150-7927 ARE THE IMMEDIATE RESISTANCE-SUPPORT LEVELS

WORLD MARKETS                             

World equities and oil nosedived while Gold soared on the unexpected outocome of the UK referendum where Brits decided to leave the European Union with 51.9% majority.

US indices 3.4%-4.1%.In Europe while FTSE itself recovered quite a bit from the 8% lower opening to end 3.2% down, other markets plunged 7%-12.5% with Italy and Spain leading the losses. Nikkei nosedived 8%.

Pound sterling, which had touhced a high of $1.50 before the Brexit on late Thursday, plunged all the way to $1.3224, its lowest since 1985, and was last near $1.366.

Treasury yields fell sharply. US 10-year yields hit a low of 1.406%, its lowest since July 26, 2012 before recovering to 1.57%. The German 10-year bund yield fell back into negative territory.

Financials led the fall in US as well as Europe.  Shares of Greek and Italian banks, which were already under pressure because of concerns about their bad debt piles, were notably poor performers. British retailers were hit, likely due to fears of the effect the vote could have on consumer confidence and spending. Travel and leisure stocks were also under pressure. Housebuilders felt the heat, due to uncertainty over investment in the U.K. post-Brexit.

After the unexpected result, David Cameron announced his resignation as Prime Minister of the United Kingdom.

In U.S. economic news, durable goods orders fell a more than expected 2.2% in May. The University of Michigan June consumer sentiment was 93.5.

WTI crude fell $2.47 or 4.9% to $47.64 a barrel. Gold climbed 5.5% or $59 to $1322 an ounce.

For the week, Dow and S & P 500 lost 1.6% each while Nasdaq fell 1.9%. In Europe, Germany fell 0.8% and France was down 2.1% but FTSE itself ended 2% higher.

Scotland's First Minister on Saturday said that the country would work to protect its EU membership, including preparing for a fresh independence vote.

Japan's government and central bank will hold an emergency meeting on Monday to discuss how to respond to Brexit-related market turbulence

AT HOME

After plunging more than 4% on the back of unexpected Brexit, benchmark indices recovered nearly half of the losses post European markets open to end lower by little over 2%. Sensex settled at 26398, down 605 points while Nifty lost 182 points to finish at 8089. BSE mid-cap and small-cap indices fell 1.1% and 1.5% respectively. All the BSE sectoral indices ended in red with Realty index leading the tally, down 3.7%, followed by Industrial and Metal indices leading the tally, down 3.6% each.

FIIs net sold stocks and index futures worth Rs 629 cr and 1768 cr respectively but net bought stock futures worth Rs 14 cr. DIIs were net buyers to the tune of Rs 115 cr.

Rupee depreciated 71 paise to end at 67.96/$.

OUTLOOK

Today morning, Nikkei is up nearly a percent and half and Shanghai is up about half a percent. Other Asian markets are down 0.4%-1% and SGX Nifty is suggesting about 60 points lower start for our market.

Readers would recall that in the run-up to the Brexit vote, we had been advising staying light on the back of uncertainty over the vote itself as well as the looming 8295 resistance.

The fear turned out to be correct as Nifty saw massive volatility on Friday, first plunging all the way to 7927, hen recovering sharply to close at 8089 but is set to open with a down gap today.

7927, the low made on Friday, which also coincides with the 61.8% retracement level of the 7716-8295 upmove, is the immediate support to eye. A breach of 7927 would open up the possibility of retest of 7716 bottom. On the way up, 8150, the 61.8% retracement level of the recent 8286-7927 fall, would be the immediate hurdle to eye above which 8295 would be the major resistance to eye.

Traders would do well to still keep the trading volumes low as volatility is likely to stay for couple of days.

IT’S BIG RISK-OFF AS LEAVE CAMP LEADS

IT’S BIG RISK-OFF AS LEAVE CAMP LEADS

WORLD MARKETS                             

US indices soared 1.3%-1.6% following increased expectations the U.K. will vote to remain in the European Union.

The pound traded near $1.490, its highest since December. Dollar index fell about 0.4%.

US weekly jobless claims fell to 259,000. The flash Markit manufacturing PMI for June was 51.4, up from 50.7 in May.

New home sales declined 6% in May to 551,000 units.

US crude rose 98 cents or 2% to $50.11 a barrel. Gold fell $7 to $1263 an ounce.

European markets climbed 1.2%-3.7%.

AT HOME

After a lackluster morning trade, benchmark indices spiked up post European markets opening to end with gains of about eight tenth of a percent, breaking two-day losing streak. Sensex added 237 points to settle at 27002 while Nifty finished at 8270, up 67 points. BSE mid-cap index rose 0.3% while the small-cap index ended a tad lower. BSE Bankex climbed 1.6%, becoming top gainer among the sectoral indices, followed by 1.1% rise in Finance index. Realty index was the top loser, down 1.1%, followed by half a percent lower Telecom index.

FIIs net bought stocks, index futures and stock futures worth Rs 82 cr, 320 cr and 362 cr respectively. DIIs were net buyers to the tune of Rs 204 cr.

Rupee appreciated 22 paise to end at 67.25/$.

Weather officials yesterday said that monsoon rains were 7% below average in the week ending June 22, narrowing the deficit since the season started on June 8.

OUTLOOK

The counting of the crucial UK referendum is going on. As per the latest results, leave camp is leading with 51.55% vote while remain camp is at 48.45%.

Reacting to this pound is down nearly 7% at 1.38, Asian markets are trading with cuts of 0.5%-2.5% with Nikkei leading the tally, FTSE futures are down nearly 5%, US futures are down 2%-2.5% and SGX Nifty is suggesting about 200 points lower start for our market. Safe haven assets are surging with gold up nearly 2% and Yen hitting 100 against the dollar.

After today's gap down opening, Nifty would be closer to the lower level of the 8295-8064 range which it has been stuck over past 12 sessions. 8064 is also the level where 34-DMA is also placed which makes it important support to eye. 7980, the erstwhile resistance, would be the next support if 8064 is taken out but one can not rule out the possibility of the fall all the way to 7726, where 34-week moving average as well as 200-DMA are placed.

We, in the run up to the Brexit vote, have been advising trading volumes low and in yesterday's report had advised hedging trading positions and portfolios. Those hedges should help in today's fall.

Traders would do well to wait for the breach of 8064 for taking fresh bearish bets.

“BREXIT” OR “BREMAIN”?

“BREXIT” OR “BREMAIN”?

WORLD MARKETS                             

US indices ended with cuts of 0.2%-0.3% ahead of the U.K. vote on whether to leave the European Union (EU).

Energy stocks fell the most as US oil eased 1.4% to $49.13 and Brent too declined 1.5% to $49.88 after data from Energy Information Administration showed U.S. crude oil stocks declined a smaller-than-expected 917,000 barrels.

Pound briefly erased earlier gains against the U.S. dollar to trade near $1.470. A poll released yesterday from TNS indicated support for "leave" holding over "remain,"

Fed Chair Yellen, speaking before the House Financial Services Committee, said she believes the recent weakness in job creation is "transitory" and was optimistic on overall growth.

US existing home sales rose 1.8% in May to an annual rate of 5.53 million units, the highest level since February 2007.

European markets, except a 0.6% lower Italy, gained 0.3%-0.6%.

AT HOME

Benchmark indices ended lower by a fifth of a percent after a choppy trading session, extending the fall to second consecutive day. Sensex lost 47 points to settle at 26766 while Nifty finished at 8204, down 16 points. BSE mid-cap and small-cap indices lost 0.1% and 0.6% respectively. BSE Industrial and Auto indices fell 0.8% each, becoming top losers among the sectoral indices while Healthcare and Realty indices gained 0.4% and 0.2% respectively.

FIIs net sold stocks and index futures worth Rs 41 cr and 497 cr respectively but net bought stock futures worth Rs 348 cr DIIs were net buyers to the tune of Rs 361 cr.

Rupee appreciated 1 paise to end at 67.48/$.

Government yesterday cleared sale of spectrum in seven frequencies estimated to be worth about Rs 5.6 lakh crore. The auction will help operators augment expansion of high-speed 4G voice and data services.

Government also announced a Rs6,000-crore package for the textiles and apparels sector to help it garner a bigger share of the global market. The package also provides the sector more flexible labour laws and financial incentives. It hopes the package will create one crore new jobs in three years, attract Rs74,000 crore in investment and generate $30 billion in exports earnings.

The Union Cabinet today approved the norms for the next round of spectrum auctions and a new textiles policy to push manufacturing and exports, besides extending the scheme to assist debt-ridden power distribution companies in the state sector.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally higher start for our market.

For past two weeks, Nifty has been consolidating between 8295 and 8064 and as we have been advising keeping trading volumes low keeping in mind looming "Brexit" vote.

The big day is finally here. UK will vote today to decide whether it wants to remain in the European Union or not. The results are expected to start coming in around our market opening tomorrow.

Depending on the outcome, a big gap up or down is not ruled out. If 8295 is decisively taken out next major target to eye would be 8655, which is the 52-week high made in last July.

On the way down 8064, the bottom made last week, which roughly coincides with the 34-DMA placed around 8050, is the important immediate support to eye, upon breach of which 7980 would be the next support but a further fall towards 7725, the 34-week moving average, cannot be ruled out.

Traders would do well to keep trading positions hedged or play through options route than futures. Investors can buy Nifty puts or sell higher strike calls for hedging the portfolio.

8295-8064 CONTINUES TO BE BROAD RANGE

8295-8064 CONTINUES TO BE BROAD RANGE

WORLD MARKETS

US indices gained 0.1%-0.3% yesterday digesting the remarks from the Fed chair and counting down to the upcoming British vote to decide whether to remain in the European Union.

Federal Chair Yellen, who began her two-day testimony before Congress, said in prepared remarks that a cautious approach to monetary policy remains appropriate and while the pace of improvement in the labor market has slowed, it's important not to overreact to one or two labor reports. She added that a United Kingdom vote to leave the EU could have significant economic repercussions.

Dollar index rose about half a percent. Gold tumbled $20 to $1272 an ounce.

US oil ended off-the-day low but still down 52 cents or 1.05% at $48.85 a barrel. Data from American Petroleum Institute showed larger than expected 5.2 million barrels fall in crude inventories.

European markets rose 0.2%-0.6%. German ZEW institute's economic sentiment index for June came in at 19.2, a big rise from the 6.4 recorded in the previous month, giving a boost to investor sentiment.

                                                             

AT HOME

Benchmark indices ended lower by a fifth of a percent after a range bound session. Sensex lost 54 points to settle at 26813 while Nifty lost 19 points to finish at 8220. BSE mid-cap and small-cap indices however gained 0.1% and 0.4% respectively. BSE Utilities and Power indices fell 0.8% and 0.7% respectively, becoming top losers among the sectoral indices while Auto and Consumer Durable indices were the top gainers, up 0.6% and 0.4% respectively.

FIIs net bought stocks and stock futures worth Rs 485 cr and 294 cr respectively but net sold index futures worth Rs 570 cr. DIIs were net sellers to the tune of Rs 336 cr.

Rupee depreciated 18 paise to end at 67.49/$.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.8% with Nikkei leading the losses and SGX Nifty is suggesting about 20 points lower start for our market.

Nifty continues to consolidate within 8295-8064 range a decisive crossover of which, on either side, will give fresh direction. Keeping in mind this range as well as the looming Brexit vote, we have been advising keeping trading volumes low and that continues to be the view.

8150 is the immediate support on the hourly chart, which should serve as the stop loss for trading longs.

NIFTY SET TO CHALLENGE 8295 HURDLE; 8150 IS THE IMMEDIATE SUPPORT

NIFTY SET TO CHALLENGE 8295 HURDLE; 8150 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices, after climbing nearly a percent and half in the initial trade on easing Brexit fears, gave away nearly half of the gains though the session to end with gains of 0.6%-0.8%.

WTI crude rose 2.9% to $49.37 a barrel. Brent gained 3% to $50.65.

U.S. Treasury yields rose, with the 2-year yield around 0.73% and the 10-year yield around 1.67%. The 10-year German bund yield held in positive territory after falling into negative territory last week for the first time.

Dollar index fell more than half a percent. The pound surged more than 2% against the dollar to trade near $1.467. Gold closed off the day low at $1292, down $3.

European markets soared 2.5%-3.6%

AT HOME

After falling about three fourth of a percent in the initial trade, benchmark indices saw a sustained northward move through the session to end with gains of about nine tenth of a percent. Sensex settled at 26867, up 241 points while Nifty added 68 points to finish at 8238. BSE mid-cap and small-cap gained 0.4% each. Except a 0.1% cut in BSE FMCG index, all the sectoral indices ended higher with IT and Teck indices leading the tally, up 2% each.

FIIs net sold stocks and index futures worth Rs 537 cr and 1336 cr respectively but net bought stock futures worth Rs 290 cr. DIIs were net buyers to the tune of Rs 724 cr.

Rupee depreciated 23 paise to end at 67.31/$.

Government yesterday announced relaxed foreign direct investment (FDI) norms in single brand retail, civil aviation, airports, pharmaceuticals, animal husbandry and food products.

It has allowed up to 100% FDI in defense through the approval route, 100% FDI in food product e-commerce, 100% FDI in greenfield pharma via the automatic route, 100% in brownfield pharma - of which 74% will be through automatic route - 100% FDI in scheduled airlines, and up to 49% FDI in airlines through automatic route.

While FDI in defence beyond 49% was already allowed through approval route and up to 49% through automatic route, the new norms have done away with the condition of access to ‘state-of-art’ technology in the country for FDI more than 49%.

The government has also decided to relax local sourcing norms up to three years and a relaxed sourcing regime for another five years for entities undertaking single brand retail trading of products having ‘state-of-art’ and ‘cutting edge’ technology, which will likely make it easier for companies like Apple to set up manufacturing units in India.

OUTLOOK

Today morning Asian markets are trading flat to modestly higher and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had reiterated the view that 8064, from where Nifty has shown repeated bounce, continues to be important immediate support while 8213, the top made last Wednesday, continues to be immediate hurdle above which 8295, the top made in early June, would be the bigger hurdle to eye.

The benchmark, after touching a low of 8107 in the initial trade, rebounded smartly to end at 8238, crossing the 8213 hurdle and moving towards 8295 resistance.

8295 continues to be next target to eye. Immediate support on the hourly chart is placed around 8150, which should serve as the stop loss for trading longs.

Fed Chair Janet Yellen is scheduled to testify today in front of Congress on a number of matters, including monetary policy.

“REXIT” SURPRISE BEFORE THE “BREXIT” VOTE

“REXIT” SURPRISE BEFORE THE “BREXIT” VOTE

WORLD MARKETS                             

Dow and S & P 500 fell 0.3% while Nasdaq lost 0.9% on Friday amid continued uncertainty ahead of next week's scheduled Brexit vote.

Healthcare and Tech stocks fell the most while Energy was the top performer as US oil snapped a six day losing streak, settling up $1.77 or 3.8% at $47.98 a barrel.

Apple tumbled 2.3% after news intellectual property regulators in Beijing barred the company from selling models of the iPhone 6 and 6 Plus in the city, citing strong similarity to an existing Chinese phone.

In a significant shift in views, St. Louis Fed President James Bullard said low growth and a very low fed funds rate of just 63 basis points will likely remain in place through 2018, implying just one more hike until that time.

Housing starts declined 0.3% in May, while building permits rose 0.7%.

Key European markets gained 0.8%-1.2% while Italy soared 3.5% and Spain gained 2% on the back of a rally in banking stocks and a tick-up in oil prices.

Dollar index fell 0.4%. Gold fell $4 to $1295 an ounce, its first negative day in eight.

For the week, US indices fell 1.1%-1.9%. Key European markets were down 1.6%-2.6%. In Asia, Nikkei, in its worst weekly fall since the one ended February 12, nosedived 6%, Hang Seng was down 4.2% while Shanghai lost 1.4%. US oil fell 2.2%. Gold gained 1.5%.

On the Brexit front, Saturday, a fresh poll showed support for the remain camp had taken a narrow 44% against 43% lead over the leave campaign, based on interviews conducted on Thursday and Friday.

AT HOME

After gaining about two third of a percent in the initial trade, benchmark indices gave about half of them through the session to end higher by nearly four tenth of a percent. Sensex added 100 points to settle at 26626 while Nifty finished at 8170, up 29 points. BSE mid-cap index ended marginally in the red while small-cap index gained 0.3%. BSE Realty index soared 3.5%, becoming top gainer among the sectoral indices, followed by 1.1% rise in Telecom index. Healthcare and Capital Goods indices lost 0.8% and 0.4% respectively.

FIIs net bought stocks worth Rs 32 cr but net sold index futures and stock futures worth Rs 480 cr and 91 cr respectively. DIIs were net sellers to the tune of Rs 26 cr.

Rupee appreciated 13 paise to end at 67.08/$.

In a surprise development, RBI governor Rajan, in a letter written to RBI staff, announced that he will return to academia when his term ends on September 4, 2016.

OUTLOOK

Today morning, except a marginally lower Shanghai,  other Asian markets are up between 1%-2% with Nikkei on the top but SGX Nifty, reacting to REXIT (Rajan Exit), is suggesting about 50 points lower start for market.

As mentioned in Friday's report, 8064, from where Nifty has shown repeated bounce, continues to be important immediate support while 8213, the top made last Wednesday, continues to be immediate hurdle above which 8294, the top made in early June, would be the bigger hurdle to eye. Also, we have been advising keeping volumes low on account of looming Brexit vote scheduled for this Thursday.

That continues to be the view.

8064 IS THE IMMEDIATE SUPPORT, 8213 IMMEDIATE HURDLE

8064 IS THE IMMEDIATE SUPPORT, 8213 IMMEDIATE HURDLE

WORLD MARKETS                             

US indices, after falling nearly a percent in the initial trade, rebounded nearly a percent and half from the bottom of the day to end with gains of 0.2%-0.5%, breaking the five day losing streak.

Telecom stocks were the top gainers while energy was the only loser as oil fell $1.80 or 3.75% to $46.21 a barrel. Brent fell 3.6% to $47.19.

The 10-year treasury yield after following to 1.518, its lowest since August 2012, recovered to trade near 1.57%.

Gold gained $10 to $1298 an ounce.

European markets too recovered from lower levels to end with cuts of 0.3%-1%. European car sales rose 16% in May.

Earlier Nikkei tumbled 2.2% and yen hit 103.58, its strongest level since August 2014, after the Bank of Japan did not offer additional monetary stimulus.

AT HOME

After plunging more than a percent and half in the morning trade, benchmark indices recouped nearly half of the losses in the noon trade to end lower by about eight tenth of a percent. Sensex lost 201 points to settle at 26525 while Nifty finished at 8141, down 66 points. BSE mid-cap and small-cap indices lost 0.4% and 0.6% respectively. Except a 0.4% rise in Metal index, all the BSE sectoral indices ended in red with Telecom index and Bankex leading the tally, down 2.2% and 1.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 157 cr, 439 cr and 112 cr respectively. DIIs were net sellers to the tune of Rs 163 cr.

Rupee depreciated 6 paise to end at 67.21/$.

India's current account deficit for the Jan-March quarter narrowed to USD 0.3 bn, a 0.1% of the GDP from $7.1 bn in the previous quarter.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.5% with Nikkei leading and SGX Nifty is suggesting about 50 points higher start for our market.

In yesterday's report we had mentioned that while existing longs can be held on to with the stop loss of 8130, traders would do well to keep volumes low on account of the looming Brexit vote and 8295 hurdle.

The benchmark, in a volatile session, plunged all the way to 8074 and then rebounded to end at 8141 yesterday and is set to open with 50 points positive gap today.

In past couple of sessions, Nifty has repeatedly taken support around 8064 bottom made on Monday. In that sense 8064 is the important immediate support to eye, upon breach of which 34-DMA, placed around 7990, would be the next major target to eye.

On the way up, 8213, the top made on Wednesday, is the immediate hurdle above which 8295, the top made last week, would be the bigger hurdle to tackle.

BACK TO BREXIT WORRIES

BACK TO BREXIT WORRIES

WORLD MARKETS                             

US indices fell more than half a percent in last half an hour or so to end with cuts of a fifth of a percent, extending the losing streak to fifth straight day.

The Federal Reserve kept rates unchanged as expected. Six members projected only one hike this year, although the median expectation remained two hikes this year.

In its post-meeting statement, the Fed noted that the unemployment rate had declined but "job gains have diminished." Yellen said in a press conference following the statement release that the so-called Brexit vote, due on June 23, was also one of the factors in Wednesday's decision. Fed lowered its growth projection for 2016 to 2% from March's 2.2% and for 2017 to 2% from 2.1%.

Dollar index, after touching an intraday high of 95.04, eased to end at 94.60. Treasury yields too plunged post statement with the 2-year yield falling to near 0.67%, its lowest since mid-February, and the 10-year yield near 1.58%.

Gold gained to briefly top $1,300 an ounce, hitting its highest since early May.

US oil, after touching a high of $48.72 on the back of EIA data showing a decline of 933,000 barrels in US crude oil stocks, reversed to close 48 cents or 1% lower at $48.01 a barrel.  

In economic news, US industrial production declined 0.4% in May and April's figure was revised lower to show a 0.6% increase versus the previously reported 0.7%. May capacity utilization edged lower from the prior month to 74.9%. The producer price index rose a slightly more-than-expected 0.4% in May, following a 0.2% rise the prior month. The core PPI that excludes food, energy and trade services fell 0.1% last month after rising 0.3% in April. The June Empire State Manufacturing Survey rose to 6.0 from a negative 9 print last month.

European markets gained 0.7%-1.5%. The German 10-year bund yield traded in negative territory, but off record lows touched Tuesday.

Earlier, Shanghai Composite rose more than 1.5%, shrugging off a decision by stock index provider MSCI on Tuesday to delay inclusion of mainland-traded Chinese A-shares in its key emerging market index.

AT HOME

After a mildly higher start, benchmark indices saw significant addition to gains through the session to end with mammoth gains of about a percent and quarter, registering the largest single day gain since 26th May. Sensex settled at 26726, up 331 points while Nifty added 98 points to finish at 8207. BSE mid-cap and small-cap indices gained 0.6% and 0.8% respectively. All the BSE sectoral indices ended higher with Capital Goods and Utilities indices leading the tally, up 2.3% and 2.1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 108 cr, 639 cr and 227 cr respectively. DIIs were net buyers to the tune of Rs 234 cr.

Rupee appreciated 11 paise to end at 67.15/$.

SBI soared 4% after the Union Cabinet approved the merger of five associate banks with SBI.

Government also approved its long-awaited National Aviation Policy, which contains various measures to boost the country's under-penetrated aviation sector and boost connectivity across towns. The 5/20 rule has been replaced with 0/20 which means airlines would continue to need 20 aircrafts to fly international but the earlier rule of 5 year experience has been done away with. Airfares for 30-minute and 1-hour flights have been capped at Rs 1200 and Rs 2500 respectively.

India's trade deficit in May stood at USD 6.27 bn, up from 4.84 bn in April. Exports fell 0.8% y-o-y to $22.2 bn and imports were down 13%. While exports were down for the 18^th consecutive month, fall this time was the lowest during this period.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and half with Hang Seng and Nikkei leading on the way down and SGX Nifty is suggesting about 25 points  lower start for our market.

Nifty, on Tuesday made a double bottom around Monday’s low of 8064 and rebounded sharply yesterday to end at 8221, crossing the immediate hurdle of 8215 and generating a buy on the hourly chart.

8295, the top made last week, is the next major hurdle to eye, a weekly close above which would open up the space for the further upside till about 8655, which is the top made in July 2015 and also the 52-week high.

Immediate support is placed around 8130 with the stop loss of which trading longs can be held on to. However, taking in account the looming Brexit vote and 8295 hurdle which is very close, traders would do well to keep volumes low and let the benchmark cross 8295 hurdle decisively before taking aggressive longs.

The Bank of Japan is set to release its statement on monetary policy today.

NIFTY REBOUNDS AFTER HOLDING 8064 SUPPORT; FED IN FOCUS

NIFTY REBOUNDS AFTER HOLDING 8064 SUPPORT; FED IN FOCUS

WORLD MARKETS                             

US indices ended well-off the session low with cuts of 0.1%-0.3% yesterday, amid decline in oil and looking forward to the outcome of Fed meeting.

US Treasury yields, after touching their lowest since mid-February, recovered with 10-yearyield near 1.62% and the 2-year yield near 0.72%. Earlier, the German 10-year bund yield fell into negative territory for the first time to hit a low of minus 0.034%. The U.K. 10-year gilt yield hit a fresh record low of 1.115%. The Japanese 10-year yield hit a record low of negative 0.168%.

US oill fell 39 cents or 0.8% to $48.49 a barrel after data from the American Petroleum Institute showed U.S. crude inventories rose by 1.2 million barrels in the week to June 10 to 536.7 million, compared with expectations for a decrease of 2.3 million barrels. Brent fell 52 cents to $49.83.

US retail sales rose a more-than-expected 0.5% in May. Import prices rose 1.4%, their largest gain in more than four years, while export prices jumped 1.1% in May. Business inventories rose 0.1% in April.

Dollar index gained about 0.6%. 

European markets tumbled 1.4%-2.3%.

AT HOME

After falling about half a percent, benchmark indices saw a sudden surge in the late noon trade to recoup all the losses and end flat. Sensex settled at 26396, down 1 point while Nifty lost 2 points to finish at 8109. BSE mid-cap and small-cap indices gained 0.2% and 0.5% respectively. BSE Realty index gained 0.8%, becoming top gainer among the sectoral indices, followed by half a percent rise in Healthcare and Industrial indices. Oil & Gas and Energy indices lost half a percent each.

FIIs net sold stocks, index futures and stock futures worth Rs 113 cr, 1881 cr and 174 cr respectively. DIIs were net sellers to the tune of Rs 32 cr.

Rupee depreciated 13 paise to end at 67.26/$.

In the meeting of state finance ministers held yesterday, states unanimously backed GST and agreed that the ceiling rate should not be prescribed in the Constitution Amendment Bill that is awaiting a Rajya Sabha nod. There will be meeting again in July to discuss issues linked to the revenue neutral rate under GST and the issue of dual control.

OUTLOOK

MSCI yesterday said it would delay inclusion of mainland-traded Chinese A shares in its key emerging market index, after international institutional investors indicated that they would like to see further improvements in accessibility to the market. MSCI said that it would monitor the implementation of the recently announced policy changes and will seek feedback from market participants.

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that 8064, the low made on Monday, is the immediate support, upon breach of which 8000 would be the next major target to eye. The benchmark, after touching a low of 8069, rebounded to close at 8109.

8064 continues to be immediate support. 8216 continues to be immediate resistance on the hourly chart.

Fed, at the end of its two day meet, is expected to leave interest rates unchanged following gloomy jobs data and rising concerns over the possibility of a Brexit. Market is also expecting dovish comments from the Fed chair Yellen.