US, EUROPE TUMBLE ON US TRADE DATA, GREEK WORRIES; 8240 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

US, EUROPE TUMBLE ON US TRADE DATA, GREEK WORRIES; 8240 CONTINUES TO BE IMMEDIATE SUPPORT FOR NIFTY

WORLD MARKETS                             

US indices ended with steep cuts of 0.8%-1.6% yesterday amid renewed concerns over the state of the U.S. economy and Greece.

The March trade deficit came in at $51.4 billion, above expectations and the largest since 2008 as imports surged, which sparked concerns about economic growth for the first quarter. February's figure was increased slightly to $35.9 billion from $35.4 billion. On the positive side, April's non-manufacturing ISM hit a five-month high, coming in at 57.8 versus the expected 56.3 and March's 56.5. 

Longer-term bond yields extended gains after the economic reports, with the U.S. 10-year Treasury yield hitting a high of 2.22 percent for the first time since March 10.

Greek stocks and bonds sold off on media reports that the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns. Germany's finance minister later rebuffed the report. Athens is facing a 750-million-euro ($832 million) debt repayment to the International Monetary Fund next week, but there are fears it will run out of cash unless it reaches a deal with creditors to unlock the next tranche of bailout money.

Nymex oil shot up $1.47 or 2.5% to $60.40 a barrel, its highest since December 10. Brent climbed $1.05 to $67.50.

European markets, except a 0.8% lower FTSE, saw steep cuts in the vicinity of two and a half percent. Meanwhile European Commission raised eurozone economic growth forecast for 2015 to 1.5% from 1.3%.

Earlier, Chinese shares plummeted 4% amid reports of brokerages raising margin requirements.

AT HOME

Benchmark indices ended modestly lower after a choppy trading session. Sensex settled at 27440, down 50 points while Nifty lost 7 points to finish at 8325. BSE mid-cap and small-cap indices however gained 0.1% and 0.6% respectively. BSE Metal index soared 2.9%, becoming top gainer among the sectoral indices, followed by 1% rise in Oil & Gas index. Power and Consumer Durable indices lost 0.8% and 0.6% respectively.

Kotak Mahindra reported better-than-estimated 29.4% rise in fourth quarter net profit at Rs 527 cr. NII rose 16.2% to Rs 1123 cr. Gross NPA improved to 1.85% from 1.87% sequentially and Net NPAs improved to 0.92% from 0.97%. The bank announced issue of bonus shares in the ratio of 1:1.

FIIs net sold stocks and index futures worth Rs 757 cr and 924 cr respectively but net bought stock futures worth Rs 1030 cr. DIIs were net buyers to the tune of Rs 979 cr.

Rupee depreciated 2 paise to end at 63.44/$.

Congress yesterday supported Goods and Services Tax (GST) in Lok Sabha but opposed some of the provisions of the bill on it introduced by the BJP government, demanding that it be sent to the Parliamentary Standing Committee, which was supported by parties like AIADMK and BJD. TMC said it was "broadly supporting" the bill while AIADMK said it was against it as Tamil Nadu ruled by it would lose over Rs 10000 crore due to the new tax structure.

The Real Estate (Regulation and Development) Bill 2013 will be referred to a Select Committee by the Rajya Sabha today.

OUTLOOK

Today morning Shanghai and Hang Seng are trading modestly higher, other Asian markets are in red and SGX Nifty is suggesting about 35 points lower opening for our market.

After Nifty crossed the immediate hurdle of 8308 on Monday, we had recommended going long with the stop loss of 8240 for the target of about 8500. That continues to be the view.