12041 CONTINUES TO BE IMMEDIATE HURDLE; TRAIL STOP-LOSS TO 11836

12041 CONTINUES TO BE IMMEDIATE HURDLE; TRAIL STOP-LOSS TO 11836

WORLD MARKETS

US indices gained 0.2%-0.3%, rebounding from previous sessions' losses, but gains were kept in check as worries over global economy and trade persisted.

US 10-year treasury yield fell to 2.227%, near 20-month lows.

Media reports suggested that China has halted soy purchases from the U.S. Chinese Vice Foreign Minister Zhang Hanhui said yesterday that provoking trade disputes amounted to “naked economic terrorism.”

In economic news, the second read on first-quarter U.S. GDP showed the economy expanded by 3.1% on an annualized basis, lower than the first estimate of 3.2% but topping estimate of 3%.

US oil tumbled 3.8% to $56.59 and Brent eased 3.9% to $66.54 a barrel after Energy Information Administration (EIA) said crude stockpiles fell nearly 300,000 barrels last week, less than the 900,000-barrel decline forecast.

European markets, except 0.3% lower Italy, rose about half a percent each.

AT HOME

After a flattish start, benchmark indices saw a sustained northward move through the session to end with gains of about three fourth of a percent. Sensex settled at 39831, up 329 points while Nifty added 84 points to finish at 11945. These were the fresh record closing highs for both the indices. BSE mid-cap and small-cap indices however underperformed, rising just 0.3% and 0.1% respectively. BSE Power and Utilities indices climbed 1.6% and 1.5% respectively, becoming top gainers among the sectoral indices while Auto and Realty indices were the top losers, down 0.6% and 0.3% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1665 cr, 2221 cr and 1025 cr respectively. DIIs were net sellers to the tune of Rs 1123 cr.

Rupee depreciated 4 paise to end at 69.87/$.

ONGC's EBITDA and PAT were below expectation while revenue was a beat. Coal India reported better-than-expected numbers.

OUTLOOK

Prime Minister Modi along with 57 ministers took the oath yesterday evening. Significant changes, when compared to his first term, were inclusion of Amit Shah and former foreign secretary S Jaishankar and exclusion of Arun Jaitley, Sushma Swaraj, Suresh prabhu and Jayant Sinha.

First cabinet meeting of new government is scheduled at 5 pm today. Portfolio allocation is also likely to happen today.

Today morning, Nikkei is down about 0.8% while Hang Seng and Shanghai are marginally higher. SGX Nifty is suggesting about 15 points higher start for our market.

As we have been mentioning for past couple of days, 12041 and 11614, the top and bottom made on the election result day, are important support and resistance levels to eye.

Nifty has traded within this range for past five sessions and closed at 11945 after touching a high of 11968 yesterday.

12041 continues to be immediate hurdle to eye, a crossover of which is required for a fresh upmove. If that happens 12500 would be next major target.

11836, the low made Wednesday, is the immediate support below which 11614, the low made on the election result day, would be the crucial support to eye.

Traders are advised to hold long positions with the stop-loss of 11836.

India's Q4 GDP data will be released today and is expected to show a growth of 6.3%, down from 6.6% in the third quarter.