9544 IS IMPORTANT SUPPORT; 10070 IMMEDIATE HURDLE

9544 IS IMPORTANT SUPPORT; 10070 IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 1%-1.9% on Friday, but ended off the highs made at the open, clawing back some of the sharp losses from their worst day since March.

WTI crude settled 8 cents lower at $36.26 per barrel, while Brent crude gained 18 cents to settle at $38.73.

In Europe, FTSE and CAC rose half a percent while DAX fell 0.2%. UK GDP fell by 20.4% in April compared to the previous month, posting the biggest monthly fall on record.

For the week, the Dow and S&P 500 lost 5.5% and 4.7%, respectively, while the Nasdaq shed 2.3%, notching their worst week since March 20. Oil fell 8% for the week, posting its worst week since April and snapping 6-week winning streak.

AT HOME

After opening with cuts of more than 3%, benchmark indices saw a stunning rebound of more than 4% through the session to end higher by 0.7% each. Sensex settled at 33780, up 242 points while Nifty added 70 points to finish at 9972. BSE mid-cap and small-cap indices gained 1% and 0.1% respectively. BSE Auto and Energy indices climbed 2.9% and 2.4% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 1.5% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1311 cr, 502 cr and 840 cr respectively. DIIs were net buyers to the tune of Rs 1945 cr.

Rupee depreciated 6 paise to end at 75.84/$.

Bank stocks got a boost after Supreme Court, hearing the matter related to waiver of interst on moratorium loans, indicated that it was not considering a complete waiver of interest but was only concerned with the levy of interest on deferred interest. The court asked Solicitor General to convene a meeting of the Finance Ministry and RBI officials to decide whether interest incurred on EMIs during the moratorium period can be charged by banks. The next hearing will happen on 17th June.

For the week, Sensex and Nifty fell 1.5% and 1.7% respectively, breaking two-week winning streak.

Eicher Motors posted weak numbers for both Royal Enfield and Commercial Vehicle segment. Revenue fell 11.7% Y-o-Y, net profit was down 40% and margin contacted 780 bps.

Hindalco reported better-than-expected numbers with both Aluminium and Copper segments putting up a good show.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-1% and SGX Nifty is suggesting around 80 points lower start for our market.

In Friday's report we had said that 9599, the lower end of the gap created by big gap-up opening on 1st June, which roughly coincides with the 50% retracement level of the recent 8806-10328 upmove placed at 9567, would be the support to eye after the gap-down opening.

Nifty, after touching a low of 9544 at the open, rebounded sharply to end at 9972 but is set to open near 9900 today.

9544, the low made Friday, which also coincided with many supports, viz. 20-DMA, 50% retracement level of the 8806-10328 upmove and the trendline adjoining bottoms made in March and May, is the important support to eye.

10070, the 67% retracement level of the recent 10328-9544 fall, is the immediate hurdle, upon crossover of which, 10328, the top made last week, would be the bigger hurdle to eye.