23600, 23800 NEXT; TRAIL STOP-LOSS TO 23100

 

23600, 23800 NEXT; TRAIL STOP-LOSS TO 23100

 

WORLD MARKETS

 

Nasdaq and S & P 500 jumped 1.5% and 0.8% respectively to hit record highs after the Federal Reserve’s latest policy announcement and May inflation data pointed to easing pricing pressures. Dow however erased initial gains to end marginally in the red.

 

Federal Reserve held the Federal Funds rate at 5.25% to 5.5%, and shifted its “dot plot” to project only one rate cut this year, down from the three cuts projected in its March meeting. However, the dot plot also indicated four rate cuts totaling a full percentage point in 2025, up from three. It also indicated forward movement has been made on the inflation front.

 

CPI in May remained unchanged from April, rising 3.3% year-on-year and remaining flat on a month-on-month basis. Both were below market estimates. Monthly and yearly numbers for core CPI were also lower than anticipated.

 

U.S. 10-year treasury yield fell 9 bps to 4.316%. Dollar index fell 0.5% to 104.68. Gold rose 0.4% to $2324 per ounce.

 

WTI crude futures rose 0.8% to $78.50 while Brent futures rose 0.8% to $82.60 a barrel.

 

European markets gained 0.8%-1.4%. Data out of the U.K. showed that the country’s economic growth was flat in April as construction output declined for the third month in a row.

 

AT HOME

 

Benchmark indices rose 0.2% each, hitting fresh record intraday as well as closing highs. Sensex settled at 76606, up 150 points while Nifty added 58 points to finish at 23323. Nifty mid-cap and small-cap indices surged 1% and 1.2% respectively, both extending the winning streak to sixth straight session and hit fresh record highs. Nifty Media and PSU Bank indices were the top gainers among the sectoral indices, up 1.9% and 1.2% respectively whereas FMCG index was the top loser, down 0.5%, followed by marginally lower Auto and Realty indices.

 

FIIs net bought stocks, index futures and stock futures worth Rs 427 cr, 2997 cr and 108 cr respectively. DIIs were net buyers to the tune of Rs 234 cr.

 

Rupee appreciated 2 paise to end at 83.5450/$.

 

India's CPI inflation eased to 4.75% in May from 4.83% in April while core inflation cooled to 3.1% from 3.2%, even as food price remained stubborn. April industrial production grew at 5%, up from 4.9% in March.

 

OUTLOOK

 

Today morning, Hang Seng is up 0.8% while Nikkei and Shanghai are marginally higher. GIFT Nifty is suggesting nearly 100 points higher start for our market.

 

In yesterday's report we had said that upon sustained crossover of 23400, next upside targets for Nifty would be 23600 and 23800 while 23000-22900 was the immediate support area, with the stop-loss of which, trading longs could be held on to.

 

Nifty, after touching a high of 23441, eased to end at 23322 and is set to open above 23400 today.

 

23600, followed by 23800 are the next upside levels to eye for Nifty; 23100 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 51133, the top made last week, is the next upside target; 49100 is the immediate support on the hourly chart.

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