Friday, June 27, 2014

PRUDENT MORNING MANTRA - 27.06.2014

NIFTY CONTINUES TO CONSOLIDATE IN A NARROW CHANNEL

WORLD MARKETS

US indices, after opening with cuts of nearly three fourth of a percent, recovered through the session to end just marginally lower.

St. Louis Fed President James Bullard suggested interest rates could rise sooner rather than later. Also weighing on sentiment was data showing that U.S. consumer spending rose less than expected in May, which led many economists to pare back growth forecasts for the second quarter.  Jobless claims declined by 2,000 to 312,000 last week, in line with expectations.

European markets, except a flattish FTSE, ended with cuts in the vicinity of half a percent with shares in Barclays and Standard Chartered ending the day sharply down following news of a lawsuit and a profit warning respectively.

AT HOME

Benchmark indices plunged a percent with Nifty closing at the lowest level since 5th June. Sensex slipped 251 points to settle at 25063 while Nifty finished at 7493, down 76 points.  BSE mid-cap and small-cap indices lost 0.3% each. BSE Oil & Gas index plunged 3.9%, becoming top loser among the sectoral indices, followed by 2.7% cut in Realty index. Capital Goods and Consumer Durable indices gained 0.9% and 0.7% respectively.

FIIs net sold stocks and stock futures worth Rs 602 cr and 1313 cr respectively but net bought index futures worth Rs 154 cr. DIIs were net buyers to the tune of Rs 171 cr.

Rupee depreciated 2 paise to close at 60.14/$.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower but SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had mentioned that broadly, Nifty continues to be in a consolidation mode and traders would do well to keep trading volumes low and wait for this consolidation to get over for taking a fresh directional view on Nifty.


That continues to be advice as Nifty continues to consolidate within a narrow channel, making lower tops and bottoms. A breakout from this channel is required for a fresh directional view on Nifty. The upper and lower levels of this channel are currently placed around 7615 and 7410 respectively and would be the important levels to watch out.

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