NIFTY RETREATS FROM THE VICINITY OF 11990 HURDLE; 11770 CONTINUES TO BE NEAREST SUPPORT

NIFTY RETREATS FROM THE VICINITY OF 11990 HURDLE; 11770 CONTINUES TO BE NEAREST SUPPORT

WORLD MARKETS

US indices gained 03%-1% after U.S. reached an agreement with Mexico on tariffs. Dow extended the winning streak to sixth straight day.

Meanwhile, US president Turmp said more tariffs on Chinese goods will kick into place should Chinese President Xi Jinping fail to attend the upcoming G-20 meeting. The president previously threatened to put levies on another $300 billion in Chinese goods if a trade agreement is not reached soon.

US crude fell 73 cents or 1.4% to $53.26 a barrel while Brent eased $1 or 1.6% to $62.29 as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal and U.S.-China trade tensions continued.

European markets gained 0.3%-0.8%.  Britain’s economy sharply contracted in April after the biggest fall in car production since records began, as manufacturers were unable to reverse closures planned for the country’s departure from the European Union.

Earlier, Hong Kong’s Hang Seng index surged 2.03%, after official Chinese trade data for May beat forecasts and showed an overall trade surplus of $41.65 billion for the month.

AT HOME

Benchmark indices ended higher by four tenth of a percent after a choppy session, extending the winning streak to second straight day. Sensex added 168 points to settle at 39784 while Nifty finished at 11922, up 52 points. Broader market however underperformed as BSE mid-cap index gained just 0.1% while small-cap index tumbled 0.5%. BSE IT and Teck indices climbed 1.8% and 1.6% respectively, becoming top gainers among the sectoral indices while Oil & Gas index tumbled 1.2%, becoming top loser, followed by 0.4% lower Energy index.

FIIs net bought stocks and stock futures worth Rs 216 cr and 231 cr respectively but net bought index futures worth Rs 76 cr. DIIs were net buyers to the tune of Rs 171 cr.

Rupee depreciated 18 paise to end at 69.65/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.1%-0.4% and SGX Nifty is suggesting about 20 points higher start for our market.

After Nifty took support around our indicated 11775 support on Friday, in yesterday's report we had said that "11990, the two third retracement level of the recent 12103-11770 fall, is the immediate hurdle to eye".

Yesterday, Nifty, after touching a high of 11975 in the initial trade, slipped to end at 11922, and is set to open modestly higher today.

11990 continues to be immediate hurdle, upon crossover of which, 12103, the top made last week, would be the next target.

11770, the low made Friday, continues to be immediate support.