NIFTY TAKES OUT 12041 HURDLE; TRAIL STOP-LOSS TO 11940

NIFTY TAKES OUT 12041 HURDLE; TRAIL STOP-LOSS TO 11940

WORLD MARKETS

Dow ended flat while S & P 500 fell 0.3% and Nasdaq nosedived 1.6% as tech shares tumbled amid reports that the U.S. government is planning to target a host of big companies in the industry with antitrust and business practice probes.

Alphabet plunged 6.1% after reports said the Justice Department is preparing to launch an antitrust probe on Google. Facebook dropped 7.5% on reports that the Federal Trade Commission would be able to look into Facebook’s practices and how they impact digital competition. Amazon fell 4.6% on news that an arrangement between the Federal Trade Commission and the Justice Department put the e-commerce giant under the FTC’s microscope.

Data from the Institute for Supply Management showed U.S. manufacturing activity in the U.S. fell last month to its slowest pace of growth since October 2016.

Meanwhile, FOMC voting member James Bullard said that an interest rate cut “may be warranted soon” due to the potential impact of global trade tensions as well as weak U.S. inflation on economic growth.

On the US-China trade war front, Chinese Vice Commerce Minister Wang Shouwen said in a white paper Sunday that Washington would not be able to use pressure to force a trade deal on Beijing. He also refused to say whether the leaders of both countries would meet at the G-20 summit to work out an agreement later this month.

The benchmark 10-year U.S. note yield fell to 2.06%, its lowest level since September 2017. Spot gold climbed 1.4% to $1,323.62 per ounce, its highest since late March.

US crude fell 25 cents to $53.25 a barrel while Brent fell 71 cents to $61.28.

European markets gained 0.2%-0.6%. U.K. manufacturing activity entered into contraction territory in the month of May, IHS Markit data showed.

AT HOME

It was a record breaking day as Sensex and Nifty soared nearly a percent and half to end above 40,000 and 12,000 mark respectively for the first time ever. Sensex added 553 points to settle at 40267 while Nifty finished at 12088, up 165 points. BSE mid-cap and small-cap indices rose 0.9% and 0.5% respectively. All the BSE sectoral indices ended in green with Auto index leading the tally, up 1.9%, followed by Energy and Consumer Discretionary Goods & Services indices.

FIIs net bought stocks, index futures and stock futures worth Rs 3069 cr, 2296 cr and 1359 cr respectively. DIIs were net sellers to the tune of Rs 463 cr.

Rupee appreciated 42 paise to end at 69.25/$. 10-year bond yield fell below 7% mark for the first time in 18 months.

India May Nikkei manufacturing PMI rose to 52.7 from 51.8 in April.

May sales of TVS Motors fell 0.9% y-o-y to 3.07 lk units. Ashok Leyland's sales fell 4% to 13172 units.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 35 points lower start for our market.

For past couple of days we had been saying that 12041 and 11614, the top and bottom made on the election result day, are important support and resistance levels to eye. In yesterday's report we had said that upon crossover of 12041, 12250, followed by 12500, would be next upside targets to eye and had advised holding on to long positions with the stop-loss of 11829.

Nifty broke 12041 hurdle after six-session consolidation and surged all the way to 12103 before closing at 12088.

12250 continues to be next upside target above which 12500 would be next target. Immediate support on the hourly chart has moved up to 11940, with the stop-loss of which, trading longs should be held on to.