10725 CONTINUES TO BE NEXT UPSIDE TARGET; TRAIL STOP-LOSS TO 10440

10725 CONTINUES TO BE NEXT UPSIDE TARGET; TRAIL STOP-LOSS TO 10440

WORLD MARKETS

U.S. markets were shut on Friday to observe Independence Day.

European markets fell 0.6%-1.3% as concern over a spike in U.S. coronavirus infections tempered the optimism arising from upbeat economic data out of the U.S., China and the euro zone.

U.S. reported more than 55,000 new cases on Thursday, a global daily record. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, cautioned that the virus may have mutated to become more infectious.

China’s Caixin/Markit services PMI for June came in at 58.4, up from 55 in May and marking the highest level since April 2010.

Eurozone composite PMI came in at 48.5 in June, a sharp rise from May’s 31.9. On the flip side, German car sales plunged 40% in June to a 30-year low. Meanwhile, a survey from Britain showed 46% of manufacturers expect to lay off workers within the next six months, rising from 25% in May.

Brent crude futures fell 37 cents, or 0.9%, to $42.77 a barrel while WTI futures fell 34 cents, or 0.8%, to $40.31 a barrel.

For the week, US indices climbed 3.2%-4.6%. In Europe, DAX and CAC rose 3.6% and 2% respectively while FTSE ended flat. In Asia, except 0.9% lower Nikkei, other markets gained 2.2%-5.8%, with Shanghai on the top. WTI crude rose 4.8% to $40.32 per barrel.

AT HOME

Benchmark indices rose half a percent, extending the winning streak to third straight day and closing at the highest level since 6th March, marking a 4-month high. Sensex added 177 points to settle at 36021 and Nifty finished at 10607, up 55 points. BSE mid-cap and small-cap indices rose 0.6% and 0.5% respectively. BSE Telecom index soared 3.4%, becoming top gainer among the sectoral indices, followed by 1.7% higher Power and Capital Goods indices. Metal index was the top loser, down 0.5%, followed by 0.4% lower Bankex and Finance indices.

FIIs net bought stocks, index futures and stock futures worth Rs 857 cr, 504 cr and 39 cr respectively. DIIs were net sellers to the tune of Rs 332 cr.

Rupee appreciated 38 paise to close at 74.63/$.

India's June services PMI rose to 33.7 from 12.6 in May. Composite PMI improved to 37.8 from 14.8.

For the week, Sensex and Nifty gained 2.4% and 2.2% respectively, extending the rising streak to third straight week and closing at the highest level since the week ended 6th March, 2020.

OUTLOOK

Today morning, Asian markets are trading with gains of 1.3%-3.4% and SGX Nifty is suggesting around 80 points higher start for our market.

In Friday's report we had reiterated the view that, 34-week moving average, placed around 10725, continued to be next upside target and had advised holding on to long positions with the stop-loss of 10380.

Nifty, on Friday, rose to close at 10607 and is set to open near 10700 today.

34-week moving average, placed around 10725, continues to be next upside target. Above 10725, 10807, the 67% retracement level of the 12430-7511 fall, would be the next major target/resistance to eye.

Immediate support on the hourly chart has moved up to 10440, with the stop-loss of which, trading longs should be held on to.