7700 CONTINUES TO BE SUPPORT; 7780 IS THE IMMEDIATE HURDLE

7700 CONTINUES TO BE SUPPORT; 7780 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained about four tenth of a percent amid gains in oil prices, after April employment report missed expectations. Materials led on the way up while utilities lagged.

The April nonfarm payrolls report showed creation of 160,000 jobs, well below expectations of more than 200,000 jobs. Unemployment came in at 5%, as expected, while average hourly wages for the month rose 0.3%, also in-line with expectations. The labor force participation rate fell to 62.8%.

Dollar index, after falling to 93.28 on the back of weak jobs data, rebounded to end mildly higher at 93.83. Gold climbed $22 to $1294 an ounce.

US crude rose 34 cents or 0.8% to $44.66 a barrel. The weekly oil rig count fell by 4 for a decline of 340 rigs year-over-year.

In Europe, FTSE and DAX ended marginally higher while France and Italy fell about four tenth of a percent.

For the week, Dow and S & P 500 fell 0.2% and 0.4% for their first two-week losing streak since Feb. 12. Nasdaq lost 0.8% for its third straight week of losses. European markets tumbled 1.7%-3%. Dollar index gained 0.8% for its best week in more than a month. Nymex oil fell 2.7%, ending four-week win streak. Gold inched up 0.3% for its second straight week of gains.

AT HOME

After falling about three fourth of a percent in the initial trade, benchmark indices recouped most of the losses through the day to end marginally lower. Sensex settled at 25228, down 34 points while Nifty lost 2 points to finish at 7733. BSE mid-cap index gained 0.4% while the small-cap index lost 0.2%. BSE Utilities and Consumer Durable indices gained 0.9% and 0.7% respectively to become top gainers among the sectoral indices while Healthcare and IT indices lost 0.9% and 0.8% respectively to become top losers.

FIIs net bought stocks and stock futures worth Rs 28 cr and 85 cr respectively but net sold index futures worth Rs 989 cr. DIIs were net buyers to the tune of Rs 180 c.

Rupee ended unchanged at $66.55.

For the week, Sensex and Nifty lost 1.5% each to extend the losing streak to second week.

Grasim reported 37% jump in consolidated net profit at Rs 696 cr. Revenue rose 13.4% to Rs 10000 cr. Operating profit rose 29.3% to Rs 2002 cr and margin rose 245 bps y-o-y to 20.02%.

IT services major Cognizant reported 0.9% q-o-q dip in Jan-March quarter revenue at $3.2 bn. The company lowered its revenue forecast for the fiscal 2016 to be in the range of USD 13.65-14 bn from its earlier estimate of 13.65-14.2 bn.

OUTLOOK

Data over the weekend showed China's April exports fell 1.8% and imports plunged 11%.

Today morning, Shanghai is down nearly 2% but other Asian markets are trading with gains in the vicinity of half a percent SGX Nifty is suggesting about 25 points higher opening for our market.

Oil is up nearly 2% on the back of reports over the weekend that wildfires in Canada has shut half of the country's vast oil sands capacity and exit of Saudi Arabi's long-time oil minister, which is being seen as new era for crude markets and appeared to be a reaffirmation of Saudi policy to let oil set its own pricing.

Nifty, for past three trading sessions, has been consolidating around 7700 mark, which we had suggested as the downside target as well as the support. 7700 is the 61.8% retracement level of the 7517-7992 upmove and a decisive breach of 7700 would open up the possibility of the retest of 7517 bottom.

Immediate resistance on the hourly chart has moved lower to 7780, a crossover of which will generate a buy on the hourly chart and would pave the way for further upmove.

HUL will report its quarterly earnings today.