10334 IS THE NEXT UPSIDE TRAGET; TRAIL STOP-LOSS TO 10000

10334 IS THE NEXT UPSIDE TRAGET; TRAIL STOP-LOSS TO 10000

WORLD MARKETS

US indices climbed 2.1%-3.2% on Friday, with Nasdaq hitting a record, after an unexpected surge in U.S. jobs raised hope that the economy is starting to recover from the coronavirus pandemic.

U.S. employers added 2.5 million jobs last month — the largest gain on record — while the unemployment rate slid to 13.3%. This was against expectation of a drop of more than 8 million jobs and the unemployment rate of 19.5%, which would have been the highest since the 1930s.

Brent futures rose $2.07, or 5.2%, to $42.07 a barrel, while WTI futures gained $2.14, or 5.7%, to settle at $39.55 per barrel, hitting a 3-month high.

European markets rose 2.2%-4%. U.K. consumer confidence in late May fell to its lowest level since the global financial crisis, while retail sales plummeted 18% across the month. German factory orders fell 25.8% in May, which was much worse-than-expected.

For the week, US indices climbed 3.4%-6.8%, with the Dow leading the gains. European markets surged 6.7%-10.9%. Asian markets rose between 4.5%-7.9%.

AT HOME

Sensex and Nifty added 0.9% and 1.1% respectively, rising for the seventh day in last eight sessions and closing at the highest level since 11th March, marking a near 3-month high. Sensex settled at 34287, up 306 points while Nifty added 113 points to finish at 10142. BSE mid-cap and small-cap indices climbed 1.8% and 2.5% respectively. Except 0.8% and 0.3% lower IT and FMCG indices respectively, all the BSE sectoral indices ended in green, with Metal and Telecom indices leading the tally, up 3.9% and 3.6% respectively.

FIIs net bought stocks and stock futures worth Rs 98 cr and 455 cr respectively but net sold index futures worth Rs 345 cr. DIIs were net buyers to the tune of Rs 47 cr.

Rupee depreciated 8 paise to end at 75.58/$.

For the week, Sensex and Nifty soared 5.7% and 5.9% respectively, extending the winning streak to second straight week and closing at the highest level since the week ended 6th March, 2020, marking a 3-month high.

SBI reported lower-than-expected NII and net profit but improvement in asset quality. NII fell 0.8% y-o-y to Rs 22766 cr while net profit surged 327% to Rs 3581 cr, aided by stake sale in SBI cards worth Rs 2731 cr. Gross NPA ratio improved to 6.15% from 6.94% q-o-q while net NPA ratio improved to 2.23% from 2.65%. Fresh slippages stood fell to Rs 8105 cr from Rs 16525 Q-o-Q. The bank set aside Rs 11,893 crore as provisions against bad loans in the fourth quarter, compared to Rs 8,193 crore in the previous quarter.

L&T reported in-line with expected revenue and net profit number while margin missed estimate. Management commentary was cautious.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-0.8% and SGX Nifty is suggesting around 90 points higher start for our market.

In Friday's report we had said that 10176, the top made Wednesday, continued to be immediate hurdle, upon crossover of which, 10334, the upper end of the gap created by gap-down opening on 12th March, would be the next target to eye. We had also advised trailing the stop-loss in long positions to 9800.

Nifty, on Friday, rose to close at 10142 and is set to open above 10200 today.

10334, the upper end of the gap created by gap-down opening on 12th March, would be the next target to eye. Above 10334, 10550, the 61.8% retracement level of the entire 12430-7511 fall, would be important target/resistance to eye.

Immediate support on the hourly chart would have moved higher to 10000 after today's higher start and should work as fresh stop-loss for trading longs.