NIFTY NEARS 10553 HURDLE; 10194 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY NEARS 10553 HURDLE; 10194 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Dow fell 0.3% while S & P 500 and Nasdaq rose 0.5% and 1% respectively following positive vaccine news and strong U.S. economic data.

Pfizer released positive results from its closely-watched human trial of a Covid-19 vaccine.

ADP and Moody’s Analytics said private payrolls jumped by 2.37 million in June and payrolls for May were revised to a gain of more than 3 million from a loss of 2.76 million.

Brent crude rose 67 cents, or 1.5%, to $41.90 a barrel and WTI crude rose 44 cents, or 1.1%, to $39.73. U.S. crude inventories fell more than expected, dropping by 7.2 million barrels last week, after hitting all-time highs for three consecutive weeks.

Earlier, China's Caixin/Markit manufacturing PMI came in at 51.2 in June, above expectations of a reading of 50.5.

European markets fell upto 0.4%. Germany’s manufacturing contraction eased in June, with the final IHS Markit PMI coming in at 45.2, exceeding a flash estimate of 44.6 and up from 36.6 in May.

AT HOME

Second half of 2020 started on a positive note as Sensex and Nifty climbed 1.4% and 1.2% respectively to close at the highest level since 23rd June. Sensex settled at 35414, up 498 points while Nifty added 128 points to finish at 10430. BSE mid-cap and small-cap indices however underperformed, rising just 0.2% and 0.4% respectively. BSE Finance index and Bankex soared 2.7% and 2.6% respectively, becoming top gainers among the sectoral indices while Capital Goods and Power indices were the top losers, down 1.2% and 1% respectively.

FIIs net sold stocks worth Rs 1696 cr but net bought index futures and stock futures worth Rs 1115 cr and 132 cr respectively. DIIs were net buyers to the tune of Rs 1377 cr.

Rupee depreciated 9 paise to end at 75.59/$.

India's June Manufacturing PMI improved to 47.2 from 30.8 in May. However this was the third consecutive month of contraction in the factory activity.

GST collection in June stood at around Rs 91000 cr, higher than collections during April and May but 91% of June 2019 mop-up.

Auto sales were a mixed bag. Commercial vehicle sales disappointed and Maruti missed expectation as well but Hero MotoCorp beat estimates by a wide margin. M & M and Escorts reported strong growth in tractor sales. Tata Motors' domestic sales fell 82% to 23845 units. Ashok Leyland reported 81% fall at 2394 units. Royal Enefield sales fell 35% to 38065 units. TVS Motors sales stood at 1.98 lk units. Maruti's June sales fell 54% y-o-y to 57428 units. Eicher Motor reported 70.3% fall in VECV sales at 1358 units. M & M auto sales fell 55% to 19358 units while tractor sales rose 10% to 36544 units. Hero Motocorp sales fell 27% to 4.5 lakh units.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4%-1.5% and SGX Nifty is suggesting around 60 points higher start for our market.

For past couple of days we have been saying that 10553 on the way up and 10194 on the way down are important resistance and support levels to eye respectively. Nifty has been trading within these levels for past four sessions.

Yesterday, Nifty soared 128 points to close at 10430 and is set to open near 10500 today.

10553, the top made last week, which also coincided with the 61.8% retracement level of the entire 12430-7511 fall, continues to be important resistance, a corssover of which is required for a fresh upmove. If that happens, 34-week moving average, placed around 10725, would be the next upside target.

10194, the low made last week, continues to be important immediate support.