GO SHORT BELOW 8184 WITH STOP LOSS OF 8240

GO SHORT BELOW 8184 WITH STOP LOSS OF 8240

WORLD MARKETS                             

US indices ended off-the day low with cuts of 0.1%-0.3% amidst pullback in oil and global growth concerns, with the Dow and S & P 500 breaking three-day rising streak.

WTI oil snapped a three-day win streak to settle down 67 cents or 1.3% at $50.56 a barrel. Brent lost 56 cents to $51.95 a barrel.

Weekly jobless claims fell to 264000. Wholesale inventories rose 0.6% in April.

US Dollar index rose about half a percent. Copper fell 1.4% to $4516 a tonne, Aluminium slipped 1.7% and lead dropped 1.9%. Gold gained $10 to settle at $1273 an ounce.

European markets fell 1%-1.2%. Basic Resources sector fell the most on the back of sharp fall in metal prices. The German 10-year bund yield hit a fresh all-time low of 0.023%.

Earlier Japan's core machinery orders fell more than expected 11% in April, the largest decline since May 2014. China's consumer price inflation in May rose a lower-than-expected 2% y-o-y while producer prices fell a less-than-expected 2.8%. On Wednesday data from China showed that exports in May fell sharply and on Tuesday World Bank had cut its 2016 global growth forecast to 2.4% from the 2.9% estimated in January.

Markets in China and Taiwan will continue to remain closed today for Dragon Boat festival.

AT HOME

Sensex and Nifty tumbled 1% and 0.8% respectively, marking the worst daily fall since 19th May. Sensex lost 257 points to settle at 26763 while Nifty finished at 8204, down 69 points. BSE mid-cap index lost 0.5% while the small-cap index ended flat. BSE IT and Teck indices nosedived 2.2% and 1.8% respectively, becoming top losers among the sectoral indices while Energy and Metal indices climbed 1.6% each, becoming top gainers.

FIIs net bought stocks and index futures worth Rs 234 cr and 698 cr respectively but net sold stock futures worth Rs 375 cr. DIIs were net sellers to the tune of Rs 318 cr.

Rupee depreciated 6 paise to end at 66.71/$.

Infosys fell after Mr Pravin Rao, COO of the company, said that an increase in visa and compensation costs is likely to impact margins by 200 bps in the first quarter of FY17.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 10 points higher start for our market.

Readers would recall that we have been saying that 8243, the 61.8% retracement level of the entire 9119-6826 fall, is an important hurdle to eye, a decisive crossover, preferably on a weekly basis, is required for fresh upmove.

Nifty managed to close above 8243 on Tuesday and Wednesday but plunged sharply yesterday to 8185 before closing at 8204.

8184, the low made yesterday, which also coincides with the immediate previous bottom on the hourly chart, is the immediate support, a breach of which will generate a sell on the hourly chart and would pave the way for the further correction. 8074, the 38.2% retracement level of the recent 7716-8295 upmove, would be the downside target to eye in that case, followed by 8005, the 50% retracement level.

Traders can exit trading longs and initiate short positions below 8184, keeping a stop loss of 8240, which is the immediate hurdle on the hourly chart.