PRUDENT MORNING MANTRA - 23.06.2014

7663-7487 IS THE IMMEDIATE RANGE

WORLD MARKETS

US indices gained about a fifth of a percent on Friday with Dow and S & P 500 hitting records while extending gains into a sixth session.

European markets, except a modestly higher FTSE, lost between 0.2%-1%.

Nymex crude rose 83 cents to $107.3 a barrel and Gold gained $2.5 to $1317 an ounce.

For the week, US indices gained between 1%-1.4% while European markets, except Italy, ended with modest gains.

Developments in Iraq also remain front and center. Militants reportedly seized a frontier post on the Iraqi-Syrian border on Sunday, a day after grabbing another border crossing further north. US Secretary of State John Kerry yesterday said that the U.S. wanted Iraqis to find an inclusive leadership to contain the Islamist insurgency but would not decide on its rulers.

AT HOME

Benchmark indices ended lower by four tenth of a percent after a rangebound but choppy trading session, extending the losing streak to third straight day. Sensex lost 96 points to settle at 25105 while Nifty finished at 7511, down 30 points. BSE mid-cap and small-cap indices lost 0.4% and 0.7% respectively. BSE Consumer Durable index climbed 3.7%, becoming top gainer among the sectoral indices, followed by 0.8% rise in Realty index. Auto and Healthcare indices lost 1.1% each.

FIIs net sold stocks worth Rs 221 cr but net bought index futures worth Rs 41 cr and 69 cr respectively. DIIs were net buyers to the tune of Rs 74 cr.

Rupee closed at 60.18/$, depreciating 11 paise compared to previous close.

For the week, Nifty and Sensex lost 0.4% and 0.5% respectively, extending the losing streak to second week.

Indian Railway, on Friday evening, hiked passenger fares by 14.2% across all classes and freight charges by 6.5%.

OUTLOOK

China's HSBC flash PMI for June has come in at 50.8, improving from 49.4 in May and showing an expansion for the first time in six months.

Asian markets are trading with modest gains and SGX Nifty is suggesting about 20 points higher opening for our market.

On Friday, Nifty, after touching a high of 7560 in the morning trade, slipped to 7497 before closing at 7511. This once again reiterates the importance of 7487 bottom, a breach of which will confirm a lower-top lower-bottom formation on the daily chart.

On the way up, 7663, the top made last week, is the immediate resistance, a crossover of which is required for the further upmove.

Traders are advised to wait for this 7663-7487 range to be broken for taking fresh view on Nifty.