DOW, S & P 500 AT RECORD HIGH; NIFTY SCALES 11-MONTH HIGH

DOW, S & P 500 AT RECORD HIGH; NIFTY SCALES 11-MONTH HIGH

WORLD MARKETS                             

US indices gained 0.7% yesterday with Dow Jones industrial average closing at a new all-time high and the S&P 500 moving higher in record territory as fears eased over Brexit and Japan signaled more economic stimulus.

In UK, interior Minister Theresa May is set to become new Prime Minister on Wednesday, ending the leadership uncertainty. In Japan, Prime Minister Shinzo Abe ordered new stimulus after his coalition won an election in Japan's upper chamber by a landslide.

Unofficially starting the earnings season, Alcoa beat estimates on both the top and bottom lines Monday after the close.

US oil rose 4.6% to $46.80 a barrel. Gold fell $21 to $1335 an ounce.

Iron ore prices rose more than 6% to $58.80 a tonne.

European markets, except a flat FTSE, gained 1.3%-2.8%.

AT HOME

Benchmark indices climbed nearly two third of a percent yesterday, extending Monday's big upmove and closing at fresh 11-month high. Sensex added 181 points to settle at 27808 while Nifty finished at 8521, up 53 points. BSE mid-cap and small-cap indices gained 0.5% and 0.1% respectively. BSE Metal and Realty indices soared 2.9% and 2% respectively, becoming top gainer among the sectoral indices while FMCG and Healthcare indices fell half a percent each, becoming top losers.

FIIs net bought stocks and stock futures worth Rs 213 cr and 1149 cr respectively but net sold stock futures worth Rs 90 cr. DIIs were net buyers to the tune of Rs 19 cr.

Rupee depreciated 6 paise to end at 67.18/$.

IIP for May came in better-than-expected at 1.2% as against a decline of 0.8% in April. The figure is best since February 2016. Out of last six months, four months have seen a contraction. CPI for June remained unchanged from previous month's level at 5.77%. Core CPI however eased to 4.5% from 4.7%.

OUTLOOK

Today morning Nikkei is again surging with gain of a percent and half, other Asian markets are up between 0.5%-1% and SGX Nifty is suggesting about 25 points higher start for our market.

At the risk of repeating, we have been working with the target of 8655 ever since 8243, the 61.8% retracement level of the entire 9119-6826 fall was taken out on weekly basis on 1st July. The benchmark closed at 8521 yesterday and is set to open further higher today, moving towards the 8655 target mentioned above.

Immediate support on the hourly chart has moved up to 8400, which should serve as the new stop loss for long positions.