NIFTY REBOUNDS SHARPLY AFTER A DEEP PLUNGE; CAUTION ADVISED AT HIGHER LEVELS

NIFTY REBOUNDS SHARPLY AFTER A DEEP PLUNGE; CAUTION ADVISED AT HIGHER LEVELS

WORLD MARKETS                             

Dow and S & P 500 plunged 2% each while Nasdaq tumbled 2.4% with the Dow and S&P 500 wiping out gains for the year on escalating tensions between Greece and its creditors. S & P 500 suffered the worst single day fall of 2015.

Media reports suggested that Greece will not be paying a 1.6 billion euro loan installment due to the International Monetary Fund (IMF) on Tuesday.

S&P downgraded Greece to "CCC-" and said that the probability of the country exiting the euro zone is now about 50%.

Back in the US, pending home sales showed an increase of 0.9% in May, slightly below expectations.

European markets plunged 2-5%. Greece's main stock exchange was closed on Monday and will not reopen until July 6, with banks across the country also shut.

Earlier Shanghai Composite ended 3.3% lower despite initial attempts at gains following the central bank's rate cut over the weekend.

Nymex oil fell $1.3 lower at $58.33 a barrel. Gold rose $6 to $1179 an ounce.

AT HOME

After plunging more than 2% in the morning trade on the back of failure of Greek deal, Sensex and Nifty rebounded sharply in the noon trade to end lower by 0.6% and 0.8% respectively. Sensex settled at 27645, down 167 points while Nifty lost 63 points to finish at 8318. BSE mid-cap and small-cap indices lost 1.4% each. Except a 0.3% rise in BSE FMCG index, all the sectoral indices ended in red with Realty and IT indices leading the tally, giving away 2.2% and 1.7% respectively.

Tech Mahindra nosedived 7.6% after company warned of weak revenue and earnings in the April-June quarter due to higher visa costs and other headwinds.

FIIs net sold stocks and stock futures worth Rs 712 cr and 68 cr respectively but net bought index futures worth Rs 548 cr. DIIs were net buyers to the tune of Rs 906 cr.

Rupee depreciated 20 paise to end at 63.84/$.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that "a gap down opening would straight away take the benchmark below immediate 8330 support and in that case 8240, the 34-DMA, would be the next support to eye. Below 8240, 8125, the 61.8% retracement level of the recent 7940-8423 pullback, would be the next downside target."

The benchmark, after touching a low of 8195 in the morning trade, rebounded sharply to end at 8318, holding 34-DMA on closing basis.

However, the benchmark still is in a sell mode on the hourly chart and a sustained trading above 8370 is required to generate a buy on the hourly chart. Above 8370, 8470-8490, the major hurdle area we have been talking about, would be the next target.

8195, the low made yesterday, would be the immediate support, below which 8125, the 61.8% retracement level of the 7940-8423 upmove, would be the next support to eye.