9080 CONTINUES TO BE IMMEDIATE SUPPORT; 9218, 9274 UPSIDE HURDLE

9080 CONTINUES TO BE IMMEDIATE SUPPORT; 9218, 9274 UPSIDE HURDLE

WORLD MARKETS                             

US indices fell 0.1%-0.6% after Goldman Sachs earnings missed the mark and the U.K. government called for early elections. Ongoing U.S.-North Korea tensions and the nearing of the French presidential election also added to caution.

US housing starts fell 6.8% last month, compared with expectations for a 3.9% decline.  Industrial production rose 0.5% last month, in line with expectations.

US Vice President Mike Pence, who is on a 10-day tour of Asia, arrived in Tokyo yesterday and reassured Japan of American commitment to reining in North Korea's nuclear and missile ambitions.

In France, Left-wing candidate Jean-Luc Melenchon's surge in polls added to market worries as it becomes unclear who will win the contest.

U.S. Treasury prices rose, sending the benchmark 10-year note yield down to about 2.17% while the short-term two-year note yield slipped to 1.165%. Dollar index fell 0.8% to 99.50.

European markets tumbled 0.6%-2.5% with FTSE leading the losses, reacting to U.K. Prime Minister Theresa May's surprise announcement to call a snap general election on June 8. Pound, after initially falling to $1.2520, soared to $1.2904. Basic resources led the losses as steel and iron ore prices dropped.

The International Monetary Fund raised its global growth forecast citing manufacturing and trade gains in Europe, Japan and China although suggested protectionist policies could derail an economic recovery.

AT HOME

After gaining about nine tenth of a percent in morning, benchmark indices nosedived a percent and fourth from the top of the day in the noon trade to end lower by about four tenth of a percent, extending the losing streak to fourth straight day. Sensex settled at 29319, down 95 points while Nifty lost 34 points to finish at 9105. BSE mid-cap and small-cap indices eased 0.6% and 0.7% respectively. Except a 0.3% and 0.03% higher Utilities and Power indices respectively, all the BSE sectoral indices ended in red with Realty index leading the tally, down 3.5%, followed by 1.8% cut in Metal index.

FIIs net sold stocks and index futures worth Rs 931 cr and 245 cr respectively but net bought stock futures worth Rs 160 cr. DIIs were net buyers to the tune of Rs 878 cr.

Rupee depreciated 13 paise to end at 64.70/$.

The Met department said that the June-September monsoon is likely to be 96% of the long period average, making it a "normal monsoon".

TCS reported lower-than-expected 1.5% rise in dollar revenue at USD 4452 mn. Constant Currency growth stood at 1%. Rupee revenue fell 0.3% to Rs 29642 cr and profit fell 2.5% to Rs 6608 cr. EBIT fell 1.4% to Rs 7627 cr and margin contracted 27 bps to 25.73%. The company maintained FY18 margin guidance at 26-28%.

US President Donald Trump signed an executive order, ‘buy American, hire American’ , that calls for a review of the H-1B visa programme, saying they should never be used to replace American workers and be must given to the most skilled and highest paid applicants.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.2%-0.5% and SGX Nifty is suggesting a marginally lower start for our market.

In yesterday's report we had mentioned that 9200 is the immediate hurdle on the hourly chart above which 9273, the top made in early April, would be the next hurdle to tackle. We had also said that 34-DMA, placed around 9080, is the next support to eye.

Nifty, after touching a high of 9218 in morning trade, plunged sharply to touch a low of 9095 before closing at 9105.

9080, in the vicinity of which 34-DMA is placed, continues to be immediate support below which 9020, where previous two bottoms on daily chart made in March are placed, would be the next support to eye. 9218, the top made yesterday, is the immediate hurdle above which 9273 would be the next barrier to eye.

Having said that, Nifty is in a consolidation phase after a big upmove and traders would do well to keep volumes low in this phase.

Indusind Bank and Yes Bank will report their quarterly earnings today.

In the first divestment of FY18, government will sell 10% in Nalco through OFS route to raise Rs 600 cr.