16438 IS IMMEDIATE SUPPORT; 16794 IMMEDIATE HURDLE

 

16438 IS IMMEDIATE SUPPORT; 16794 IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices tumbled 1%-2.5% on Friday as better-than-expected non-farm payroll data reignited aggressive rate hike fears.

 

The U.S. economy added 390,000 jobs in May, higher than expectation of 328,000. The unemployment rate held at 3.6%, just above the lowest level since December 1969.

 

US 10-year treasury yield rose nearly 3 bps to 2.941%. Dollar index rose 0.4% to 102.17. Spot gold fell 1% to $1,848.67 per ounce.

 

Brent crude rose $1.80, or 1.5%, to $119.41 a barrel and WTI crude advanced $1.80, or 1.5%, to $118.67.

 

European markets fell 0.2%-1.1%.

 

For the week, Dow fell 0.9% for its ninth negative week in 10, while the S&P 500 and the Nasdaq Composite lost 1.2% and 1% respectively for their eighth losing week in nine.

 

AT HOME

 

After opening higher by a percent, Sensex and Nifty saw a sustained downward move through the session to end with cuts of 0.1% and 0.3% respectively. Sensex settled at 55769, down 49 points while Nifty lost 44 points to finish at 16584. Nifty mid-cap and small-cap indices slipped 1.6% and 0.9% respectively. BSE Power and Basic Materials were the top losers among the sectoral idnices, down 2.4% and 2.3% respectivlely, while IT and Energy indices were the top gainers, up 0.4% and 0.3% respectively.

 

FIIs net sold stocks worth Rs 3771 cr but net bought index futures and stock futures worth Rs 187 cr and 3087 cr respectively. DIIs were net buyers to the tune of Rs 2361 cr.

 

Rupee depreciated 1 paise to end at 77.62/$.

 

Cement stocks saw sharp cuts on supply concerns after sector major UltraTech approved a new capital expenditure plan of Rs 12,886 crore to increase capacity by 22.6 million tonnes per annum.

 

For the week, Sensex and Nifty rose 1.6% and 1.4% respectively, extending the winning streak to third consecutive week.

 

OUTLOOK

 

Today morning, Nikkei is little chagned while Hang Seng and shanghai are up 0.7% and 0.2% respectively. SGX Nifty is suggesting around 75 points lower start for our market.

 

In Friday's report we had said that 16925, the 50% retracement level of the entire 18115-15735 fall, was the next upside level to eye and that 16438, the low made Wednesday, would now act as immediate support, with the stop-loss of which, trading longs can be held on to.

 

Nifty, after touching a high of 16794, slipped to end at 16584 and is set to open near 16500 today.

 

16438, the low made last week, is the immediate support, upon breach of which, 20-DMA, placed around 16250, would be the next downside level to eye; 16794, the top made Friday, is the immediate hurdle, upon crossover of which, 16925, the 50% retracement level of the entire 18115-15735 fall, would be the next upside level to eye; Meanwhile, trading longs can be held on to with the stop-loss of 16438.

 

For Banknifty, 35175, the low made on Friday, is the immediate support, upon breach of which, 20-DMA, placed around 34550, would be the next downside level to eye; 36083, the top made last week, is the immediate hurdle.