RUPEE TUMBLES TO 20-MONTH LOW; NIFTY HOLDS 7961 SUPPORT

RUPEE TUMBLES TO 20-MONTH LOW; NIFTY HOLDS 7961 SUPPORT

WORLD MARKETS                             

US indices gained in the vicinity of half a percent helped by a surge in tech stocks ahead of the key April jobs report.

Initial jobless claims rose 3,000 to a seasonally adjusted 265,000 for the week ended May 2. Claims for the prior week were unrevised at 262,000, which was the lowest reading since April 2000.

Benchmark U.S. 10-year note yields traded as high as 2.27% before edging down to around 2.23%. Nymex crude fell $2 or 3.3% to $58.94 a barrel. Dollar index rose to 94.62 with the euro back below $1.13. Gold fell $8 to $1182 an ounce.

European markets ended mixed. FTSE and CAC fell while Germany, Italy and Spain gained.

AT HOME

Benchmark indices ended half a percent lower after a choppy trade. Sensex lost 118 points to settle at 26599 while Nifty finished at 8057, down 40 points. BSE mid-cap and small-cap indices lost 0.9% and 2% respectively. BSE Bankex and Realty indices tumbled 2.3% and 2.2% respectively, becoming top losers among the sectoral indices while IT and Teck indices were the top gainers, putting on 1.6% and 1.3% respectively.

FIIs net sold stocks and index futures worth Rs 1361 cr and 947 cr respectively but net bought stock futures worth Rs 984 cr. DIIs were net buyers to the tune of Rs 1158 cr.

Rupee plunged 69 paise to end at 64.23, marking 20-month low.

Hero MotoCorp reported higher than expected 4.3% rise in revenues at Rs 6794 cr but net profit fell 14% to Rs 476.5 cr on account of one-time loss of Rs 155 cr.

OUTLOOK

Today morning Shanghai is up a percent and half, Hang Seng is up three fourth of a percent, other Asian markets are trading with modest gains SGX Nifty is suggesting about 60 points higher opening for our market.

After Nifty broke the immediate support of 8240 on Wednesday, in yesterday's report we had mentioned that the next support comes in the vicinity of 7961, which was the bottom made in December. 

Nifty plunged 100 points to touch a low of 7997 before recovering to close at 8057 and is set to open with an upward gap today, giving more credence to 7961 support.

7961 continues to be important immediate support a breach of which can take Nifty all the way to around 7600, which is the 38.2% retracement level of the entire 5118-9119 upmove.

On the way up, immediate resistance on the hourly chart is placed around 8200, a crossover of which is required to generate a buy on the hourly chart which can lead to further upside till about 8350.

Traders are advised to wait for the breach of 7960-8200 for taking fresh view on Nifty.

PNB and HUL will report their quarterly earnings today.

Key report to watch out today would be US nonfarm payrolls for April which is expected to an addition of 208,000, after posting its worst report since December 2013 in March with the creation of 126,000 jobs. The key point to watch out would be wage growth, which could indicate an increase in inflation and support an interest rate hike. Unemployment rate is expected at 5.4%.