8336 CONTINUES TO BE IMMEDIATE TARGET; 8190 IMMEDIATE SUPPORT

8336 CONTINUES TO BE IMMEDIATE TARGET; 8190 IMMEDIATE SUPPORT

WORLD MARKETS

US indices, supported by weaker dollar and gains in oil prices, rose 0.3%-0.4% yesterday with the Dow closing above 18000 for the first time since April 27 and within 1% of its 52-week intraday high hit last June.

US oil futures, buoyed by strong Chinese oil demand data and supply disruptions in Nigeria, rose 87 cents or 1.73% to $51.23 a barrel, its highest settle since July 15. EIA data showed a higher-than-expected fall of 3.2 million barrels in crude inventories. US crude production edged higher, reversing a recent trend of declining output.

Dollar index fell about 0.2% too its lowest since May 6. Gold rose $15 to $1262 an ounce.

Earlier, data showed that China's exports in May fell by a more-than-expected 4.1%t from a year earlier, while imports slipped by 0.4%, much less than expected. Crude oil imports jumped the most in over six years, with iron ore imports the highest since December. Copper purchases were up more than 19%.

The World Bank downgraded its 2016 global growth forecast to 2.4% from the 2.9% forecast in January.

In Europe, FTSE gained 0.3% while DAX and CAC lost about two third of a percent.

AT HOME

It was a day of consolidation as benchmark indices, after trading in a narrow range through the day, ended flat. Sensex settled at 27021, up 11 points while Nifty added 7 points to finish at 8273. BSE mid-cap and small-cap indices however outperformed, rising 0.5% and 0.9% respectively. BSE Power and Capital Goods indices climbed 1.8% each, becoming top gainers among the sectoral indices while IT and Teck indices lost 0.6% and 0.5% respectively.

FIIs net bought stocks and stock futures worth Rs 529 cr and 62 cr respectively but net sold index futures worth Rs 204 cr. DIIs were net sellers to the tune of Rs 258 cr.

Rupee appreciated 12 paise to end at 66.65/$.

Yesterday, more than seven-and-a-half years after the Indo-US nuclear agreement was signed in 2008, Toshiba-owned American firm Westinghouse and Nuclear Power Corporation of India Ltd (NPCIL) agreed to construct six nuclear reactors in India.

Southwest monsoon hit Kerala's coasts today. IMD said that the monsoon is likely to hit coasts of Maharashtra in another 3-4 days and will cover entire country by June end.

OUTLOOK

China's May CPI has come in at 2% Y-o-Y, lower than the expected as well as previous month’s 2.3% rise. PPI is down 2.8%, better than the expected -3.3% read.

Markets in China, Hong Kong and Taiwan are shut today for the Dragon Boat Festival. Nikkei is down about 0.8% and SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had mentioned that having taken out the 8243 hurdle, next immediate target for Nifty is 8336, the top made in October 2015.

The benchmark traded in a narrow range and closed at 8273 after touching a high of 8289 in the initial trade.

8336 continues to be immediate target above which 8655, the top made in July 2015 would be the major target to eye.

Immediate support on the hourly chart is placed at 8190, which should serve as the stop loss for trading longs.

NIFTY TAKES OUT 8243 HURDLE; 8186 IS THE IMMEDIATE SUPPORT

NIFTY TAKES OUT 8243 HURDLE; 8186 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

Dow and S & P 500 came off the day high to end higher by 0.1% each while Nasdaq lost 0.1% yesterday. Healthcare stocks declined the most while energy was the top performer as US oil rose 67 cents or 1.4% to settle at $50.36, its first close above $50 since July 21 on the back of a weaker dollar and falling Nigerian oil output. Brent was up 1.8% at $51.44.

First quarter productivity, which measures hourly output per worker, contracted at an annualized rate of 0.6%, instead of the 1.0% pace reported last month. Unit labor costs, the price of labor per single unit of output, increased at an upwardly revised 4.5% pace.

European markets gained 0.2%-2% with Italy leading the tally. Euro zone GDP grew 0.6% q-o-q and by 1.7% y-o-y in the first quarter. The German 10-year bund yield fell to fresh all-time low near 0.04%, amid uncertainty around the U.K. vote on whether to leave the European Union, and ahead of the European Central Bank's corporate bond buying program set to begin Wednesday.

US dollar index fell to 93.85 from 94.02.

AT HOME

After a positive start, benchmark indices builded on these gains through the session to end higher by about eight tenth of a percent and closing at fresh high since late October. Sensex added 232 points to settle at 27010 while Nifty finished at 8266, up 65 points. BSE mid-cap and small-cap indices gained 0.3% and 1% respectively. BSE Realty index and Bankex climbed 1.7% and 1.6% respectively, becoming top gainers among the sectoral indices while Oil & Gas and Teck indices fell 0.1% and 0.05% respectively.

FIIs net bought stocks and index futures worth Rs 500 cr and 257 cr respectively but net sold stock futures worth Rs 333 cr. DIIs were net buyers to the tune of Rs 46 cr.

Rupee appreciated 19 paise to end at $66.77, its strongest level in 3-weeks.

RBI, in its bi-monthly policy review, left key rates unchanged as expected. However, the central bank warned that inflation risks were on the upside even as it retained the inflation targets set out in the April policy. On the positive side, the RBI said its policy stance continues to remain 'accommodative.' The apex bank retained GDP growth target for the current fiscal at 7.6%.

The Indian Meteorological Department yesterday said that the south-west monsoon will hit Kerala coat on 9th June, a delay of 2 days compared to earlier forecast.

In what could be good news to mobile operators, the inter-ministerial panel Telecom Commission today backed lowering of spectrum usage charge to 3 per cent of their annual revenue.

OUTLOOK

Today morning Asian markets are trading flat to modestly lower and SGX Nifty is suggesting a flattish start for our market.

Nifty, after touching a high of 8295, closed at 8266 yesterday, taking out the 8243 hurdle, after consolidating near it for couple of days.

As we have been mentioning 8336, the top made in October 2015, is the immediate target above 8243 while next major target, if the benchmark sustains above 8243, preferably on weekly basis, would be 8655, the top made in July 2015, which is also the 52-week high.

Immediate support on the hourly chart has moved up to 8186, which should serve as the stop-loss for trading longs.

NIFTY EXTENDS CONSOLIDATION AROUND 8243 HURDLE; RBI IN FOCUS

NIFTY EXTENDS CONSOLIDATION AROUND 8243 HURDLE; RBI IN FOCUS

WORLD MARKETS                             

Dow gained 0.6% and S & P 500 and Nasdaq rose half a percent each after Fed chair Yellen, at an event in Philladelphia, struck a generally positive tone on the U.S. economy, warning markets against overreacting to the disappointing May jobs report released Friday. She insisted that the Fed needed to raise rates, but stepped back from giving a time frame for hikes. The S&P 500 closed at its highest since Nov. 3 and 1.1% below its 52-week intraday high set last July.

Energy jumped about 2% in its best day since April, as U.S. crude oil futures gained 2.2% or $1.07 to settle at $49.69 a barrel, their highest since July. Brent traded above $50 to hit a fresh high for the year so far.

The U.S. dollar index came off session lows to end at 94 as against Friday's close of 93.87.

European markets gained upto 1% with FTSE leading the tally. Mining stocks gained the most.

AT HOME

After a marginally higher start, benchmark indices saw a gradual downward drift through the day too end lower by a fourth of a percent. Sensex lost 66 points to settle at 26777 while Nifty ended at 8201, down 20 points. BSE mid-cap index lost 0.1% while the small-cap index rose 0.2%. BSE Telecom and Consumer Durable indices plunged 2% and 1.4% respectively, becoming top losers among the sectoral indices while Realty and Basic Material indices were the top gainers, up 0.8% and 0.6% respectively.

FIIs net bought stocks and index futures worth Rs 28 cr and 517 cr respectively but net sold stock futures worth Rs 637 cr. DIIs were net sellers to the tune of Rs 231 cr.

Rupee appreciated 29 paise to end at 66.96/$

OUTLOOK

Today morning Shanghai is flat but other Asian markets are trading with gains of upto a percent with Hang Seng leading and SGX Nifty is suggesting about 40 points higher start for our market.

After today's gap up opening, Nifty would be back in the vicinity of 8243 hurdle, which is the 61.8% retracement level of the entire 9119-6826 fall and a decisive crossover of which is required for the fresh upmove. 8336, the top made in October 2015, would be the immediate target in that case, followed by 8655, the top made in July 2015, which is also the 52-week high.

8130-8150 continues to be the support area, a breach of which can take the benchmark to 7980, the erstwhile resistance.

RBI, in its monetary policy review today, is widely expected to leave interest rate unchanged. The focus would be on RBI's comments on liquidity deficit, i.e. the situation of banks having to borrow funds from RBI's repo window. Markets will also watch out for any cues to Governor Rajan's tenure at RBI.

NIFTY ACHIEVES 8243 TARGET; 8130 IS THE IMMEDIATE SUPPORT

NIFTY ACHIEVES 8243 TARGET; 8130 IS THE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.2%-0.6% on Friday following a sharp miss on the May jobs report.  Financial were the greatest laggards and Utilities biggest gainers.

May jobs report showed creation of 38,000 jobs, well below expectations of 162000 and casting doubt on hopes for a strengthening economic recovery and a possible Fed rate hike in the coming months. The headline unemployment fell to 4.7%. In other economic news, factory orders rose 1.9% in April. ISM non-manufacturing came in at 52.9 for May, well below April's 55.7 print.  The final Markit services PMI was 51.3 in May, down from 52.8 in April and well below the post-crisis average of 55.6.

2-year treasury yield fell to 0.77%, its lowest since May 16, and the 10-year yield dipped below 1.70% to hit its lowest since April 7. Dollar index fell 1.7% to 93.87 for its worst day since Dec. 3.

Gold surged $30 to $1243 an ounce.  Nymex oil fell 55 cents or 1.1% to $48.62 a barrel. The US rig count rose for the first time in 11 weeks.

European markets, except a 0.4% higher FTSE, fell 1%-1.7%. Latest Markit's composite PMI output for the euro zone came in at 53.1, up from April's 53.0, indicating economic growth remained subdued.

Earlier, data showed Markit Caixin China services PMI fell to 51.2 in May, from 51.8 in the previous month.

For the week, Dow lost 0.4% while S & P 500 and Nasdaq rose 0.1% and 0.2% respectively. In Europe FTSE, DAX and CAC lost 1%, 1.8% and 2.1% respectively. In Asia, Nikkei fell 1.1% but Hang Seng gained 1.8% and Shanghai surged 4.2% on speculation that MSCI could include China A-shares in its Emerging Market Index at its annual review, which will be held on June 15.

AT HOME

After gaining about half a percent in the initial trade, benchmark indices gave away all the gains through the session to end flat on Friday. Sensex was absolutely unchanged at 26843 while Nifty added 2 points to finish at 8221. BSE mid-cap and small-cap indices lost 0.1% and 0.4% respectively. BSE Telecom and Consumer Durable indices tumbled 2.6% and 1.8% respectively, becoming top losers among the sectoral indices while Bankex and Auto indices were the top gainers, up 0.8% and 0.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1585 cr (including Rs 1385 cr Idea deal), 319 cr and 246 cr respectively. DIIs were net sellers to the tune of Rs 393 cr.

Rupee appreciated 4 paise to end at 67.25/$.

For the week, Sensex and Nifty gained 0.7% and 0.8% respectively.

OUTLOOK

Today morning, Nikkei is down nearly a percent and half on stronger Yen, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 20 points higher start for our market.

Readers would recall that ever since Nifty crossed 7980 hurdle, we had been working with major target of 8243, which is the 61.8% retracement level of the entire 9119-6826 fall.

The benchmark, on Friday, touched a high of 8262 before closing at 8221, achieving the target mentioned above and vindicating our view.

As we have been mentioning for past couple of days, a decisive crossover of 8243 is required for fresh upmove. 8336, the top made in October 2015, would be the immediate target in that case, followed by 8655, the top made in July 2015, which is also the 52-week high.

8130 continues to be immediate support on the hourly chart, which should serve as the stop loss for trading longs.

Fed Chair Yellen is schedule to speak before the World Affairs Council of Philadelphia today and markets would carefully listen to her speech for getting cues to next interest rate hike after Friday’s dismal jobs report.

NIFTY SET TO CHALLENGE 8243 HURDLE; US JOBS DATA IN FOCUS

NIFTY SET TO CHALLENGE 8243 HURDLE; US JOBS DATA IN FOCUS

WORLD MARKETS                             

US indices gained 0.3%-0.4% yesterday, with the S & P 500 closing at the highest level in seven months.

Ahead of Friday's non-farm payroll data, ADP data showed private sector added 173000 jobs in May, a touch below expectations for 175000 jobs. April report was revised up too 166000 from 156000.

US oil, after initially falling on the back of OPEC agreeing on no change in policy and output ceiling, turned higher after weekly crude oil inventories showed a draw of 1.4 million barrels and closed 16 cents or 0.33% higher at $49.17 a barrel. Brent rose 0.6% to $50.04 for its first settlement above $50 since November 3.

Dollar index was mildly higher.

European markets ended mixed with modest changes. ECB, at its monthly policy review, left key rates unchanged. The central bank raised its 2016 inflation forecast to 0.2% from 0.1% seen in March and kept its longer-term forecasts steady, with expectations of a 1.6% inflation rate in 2018, still short of its target of almost 2%. The bank now sees growth of 1.6% for 2016, up from a 1.4% forecast in March. It left its growth forecast for 2017 unchanged and trimmed its forecast for 2018 to 1.8%.

President Mario Draghi warned of downside risks related to the global economy and the so-called "Brexit" vote in the U.K.

AT HOME

After trading in a narrow range for better part of the day, benchmark indices spiked up post 2 O'clock to end with gains of half a percent to close at fresh 9-month high. Sensex added 129 points to settle at 26843 while Nifty finished at 8219, up 39 points. BSE mid-cap and small-cap indices gained 0.7% and 0.3% respectively. Except a 0.7% and 0.4% cut in BSE Consumer Durable and Healthcare indices respectively, all the sectoral indices ended in green with Metal index leading the tally, up 2%, followed by 0.9% gain in Bankex and Finance index each.

FIIs net bought stocks and stock futures worth Rs 522 cr and 83 cr respectively but net sold index futures worth Rs 159 cr. DIIs were net sellers to the tune of Rs 577 cr.

Rupee appreciated 15 paise to end at 67.29/$.

Indian Meteorological Department yesterday said the monsoon rains this year are expected to be above average at 106% of the long period average and that monsoon is expected to hit Indian coast in next 4-5 days.

OUTLOOK

China's May Caixin Services PMI has come in at 51.2, down from 51.8 in April.

Today morning, Shanghai is flat, Nikkei and Hang Seng are up about half a percent and SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had reiterated the view that 8243, the 61.8% retracement level of the 9119-6825 fall, continues to be important hurdle to eye, upon decisive crossover of which 8336, the top made in October 2015, would be the next target to eye.

The benchmark gained 39 points to end at 8219 and a positive start today would take it closer to 8243 hurdle.

Immediate support on the hourly chart has moved up to 8130, which should serve as the fresh stop loss for trading longs.

Key data to watch out today would be the US May non-farm payroll, which will offer cues to whether the Federal Reserve will pull the trigger in June. Estimates are that the US economy added 164000 jobs with the unemployment rate at 4.9%.

NIFTY EXTENDS CONSOLIDATION NEAR 8243 HURDLE; OPEC, ECB MEETINGS IN FOCUS

NIFTY EXTENDS CONSOLIDATION NEAR 8243 HURDLE; OPEC, ECB MEETINGS IN FOCUS

WORLD MARKETS                             

US indices, after opening about half a percent lower, recovered through the session to end marginally in the green.

ISM manufacturing PMI for May came in at 51.3, topping expectation and improving from previous month's 50.8 reading. The final read for May on Markit's manufacturing PMI was 50.7. The flash read was 50.5, down from 50.8 in April. May auto sales came in slightly above expectation at 17.45 million.

US oil futures fell below $48 after API data showed a surprise build of 2.4 million barrels, but rebounded from there to settle 9 cents down at $49.01 a barrel. Recovery was on the back of reports that OPEC would discuss an output limit at its meeting on Thursday. Brent futures fell 0.34% to $49.72 a barrel. April construction spending fell 1.8%.

The Fed's Beige Book said there was modest economic growth since the last report. The Beige Book also said tight labor markets were pushing up wages.

European markets fell 0.6%-1.2% on the back of sharp decline in banks and miners. Markit's final euro zone manufacturing PMI came in at 51.5 in May, unchanged from the flash read and a touch below April's 51.7 print.

Dollar index fell about half a percent to 95.42.

Earlier, Nikkei fell 1.6%. Yen strengthened to 109.05 after Japanese Prime Minister Shinzo Abe announced a two-and-a-half year delay in a scheduled sales tax increase, putting plans for fiscal reforms on the back burner due to growing signs of economic weakness.

In China, the Markit Caixin manufacturing PMI fell to 49.2 in May, below expectations and down from 49.4 in April, and below the neutral 50.0 value for the 15th-straight month. The official manufacturing PMI was unchanged from the prior month in May at 50.1. The official services PMI edged lower to 53.1 in May from 53.5 in April.

AT HOME

After gaining about two third of a percent in the morning trade, benchmark indices gave away majority of the gains in the noon trade to end higher by about a fifth of a percent. Sensex settled at 26714, up 46 points while Nifty added 20 points to finish at 8180. BSE mid-cap index lost 0.3% while small-cap index gained 0.2%. BSE Telecom index climbed 2.8%, becoming top gainer among the sectoral indices, followed by 1.6% rise in FMCG index. Bankex and Finance indices were the top losers, down 1.2% and 0.7% respectively.

FIIs net bought stocks and stock futures worth Rs 260 cr and 561 cr respectively but net sold index futures worth Rs 287 cr. DIIs were net sellers to the tune of Rs 160 cr.

Rupee depreciated 18 paise to end at 67.45/$.

Maruti Suzuki sold 1.23 lakh vehicles in May, a growth of 7.1% y-o-y. M & M sold 11% more vehicles at 40656 units. Ashok Leyland sold 6% more vehicles at 9290 units. Eicher sold 5771 commercial vehicles, a growth of 43% while Royal Enfield sales growth was 37% at 48000 units. TVS Motor sold 2.44 lakh units, a growh of 11%. Hero MotoCorp registered 2% growth at 583117 units. Tata Motors sales were up 1% at 40071 units.

OUTLOOK

Today morning, Nikkei is down more than a percent and half, other Asian markets are trading flat to modestly higher and SGX Nifty is suggesting about 10 points lower start for our market.

As we have been mentioning, 8243, which is the 61.8% retracement level of the entire 9119-6826 fall, is the important hurdle to eye, a decisive crossover of which is required for the fresh upmove.

Nifty, for the second consecutive day, went close to 8240 mark but retreated to end at 8180.

8336, the top made in October 2015, would be the next target once 8240 is taken out. Nearest support on the hourly chart has moved up to 8100, which should serve as the stop loss for existing longs.

Key events to watch out today would be OPEC meeting and ECB policy review. In case of later, markets will be looking to see if the ECB changes its inflation forecast and gives any hints about further monetary policy moves.

GDP, CORE SECTOR GROWTH ACCELERATE; AUTO SALES IN FOCUS

GDP, CORE SECTOR GROWTH ACCELERATE; AUTO SALES IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 fell 0.5% and 0.1% respectively while Nasdaq gained 0.3% yesterday following disappointing reads on consumer confidence and regional manufacturing.

The Chicago PMI came in below expectations and in contraction territory at 49.3 in May. The Dallas Fed manufacturing index declined from minus 13.9 to minus 20.8 in May. Consumer confidence was 92.6 in May, down from 94.7 in April. On the other hand, personal spending increased 1% in April, the biggest gain in more than six years. Personal income rose 0.4%.

US oil settled down 23 cents or 0.5% at $49.10 a barrel ahead of Thursday's OPEC meeting. Brent was at $49.89.

European markets lost 0.6%-1.4%.

Earlier Shanghai Composite surged 3.3% following news Goldman Sachs increased the probability of inclusion of mainland Chinese A shares in its global indices to 70%. The decision is expected June 14.

AT HOME

It was time to digest heady gains made in past five days as benchmark indices fell a fifth of a percent in today's trade. Sensex lost 58 points to settle at 26668 while Nifty finished at 8160, down 18 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Auto index climbed 2.3%, becoming top gainer among the sectoral indices, followed by 1.7% rise in Industrial index. Telecom and Healthcare indices were the top losers, down 1.4% each.

FIIs net sold stocks and stock futures worth Rs 115 cr and 254 cr respectively but net bought index futures worth Rs 599 cr. DIIs were net buyers to the tune of Rs 60 cr.

Rupee depreciated 10 paise to end at 67.26/$.

India's March quarter GDP growth accelerated to 7.9% as against a revised 7.2% in December 2015. Q4 GVA growth stood at 7.4% as against 6.9% in the December quarter. For FY16, GDP growth accelerated to 7.6% against 7.2% in the previous fiscal. FY16 fiscal deficit stood at 5.32 lakh cr or 3.92% of GDP.

India's core sector grew at 8.5% in April, its fastest pace in 17 months. In March, the growth was 6.5%. 

Oil Marketing Companies hiked petrol and diesel price by Rs 2.58/litre and 2.26/litre respectively.

OUTLOOK

China's official manufacturing PMI for May has come in at 50.1, unchanged from April while the services PMI has slowed to 53.1 from 53.5. The Caixin manufacturing PMI however has slowed to 49.2 from 49.4, contracting for the 15^th straight month.

Nikkei is down about 0.7%, Shanghai is flat and Hang Seng is modestly higher. SGX Nifty is suggesting about 20 points higher start for our market.

Ever since Nifty crossed 7980 hurdle, we have been working with major upside target of 8243, which is the 61.8% retracement level of the entire 9119-6825 fall.

Yesterday, the benchmark, after touching a high of 8214, slipped to close at 8160.

8243 continues to be important hurdle to eye, a decisive crossover of which is required for fresh upmove.

On the way down, 8020, the 38.2% retracement level of the recent 7716-8214 upmove, is the immediate support.

India's May manufacturing PMI will be released today. Auto companies will report May sales figures.