NIFTY REBOUNDS AFTER TESTING 10775 SUPPORT

NIFTY REBOUNDS AFTER TESTING 10775 SUPPORT

WORLD MARKETS

Dow fell 0.1% while S & P 500 and Nasdaq rose 0.2% and 0.8% respectively with Nasdaq hitting a record high as dealmaking activity lifted technology and media shares.

Bank stocks fell after the ECB said it would hold off on raising rates until next year, sending treasury yields lower. The benchmark 10-year yield fell to 2.94%.

US retail sales rose 0.8% in May, well above estimate of 0.4% and marking the biggest gain since November. Weekly jobless claims fell to a near 44½-year-low last week

US crude rose 25 cents to settle at $66.89 while Brent fell 80 cents to $75.94 a barrel.

The ECB said its current 30 billion euros in monthly purchases would be halved to 15 billion euros in the last three months of the year. In addition, the central bank indicated that a rate hike would be unlikely before the summer of 2019. The euro tanked after the ECB announcement to trade near $1.15 from levels above $1.18 seen before the central bank's announcement.

European markets climbed 0.8%-1.4%.

AT HOME

Benchmark indices fell about four tenth of a percent, breaking 3-day winning streak. Sensex lost 139 points to settle at 35600 while Nifty finished at 10808, down 48 points. BSE mid-cap index fell 0.1% while small-cap index rose 0.1%. BSE IT and Consumer Durable indices fell 1.4% and 0.9% respectively, becoming top losers among the sectoral indices while Healthcare index soared 1.5%, becoming top gainer, followed by marginally higher Auto, Energy and Consumer Discretionary Goods & Services indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1373 cr, 1304 cr and 675 cr respectively. DIIs were net buyes to the tune of Rs 576 cr.

Rupee appreciated 2 paise to end at 67.62/$.

India's wholesale inflation grew 4.43% in May, up from 3.18% in April and hitting a 14-month high, driven by some food items and fuel prices.

OUTLOOK

Today morning, Nikkei is up 0.3% while Shanghai and Hang Seng are flat. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had said that 10930, the top made in May, is an important resistance to eye and had advised keeping a stop-loss of 10775 in long positions.

Nifty, after touching a low of 10773, recovered to end at 10808 and is set to open below 10800 today. 10773, the low made yesterday, continues to be immediate support below which 34-DMA, placed around 10700, would be the next important support to eye.