BROADER MARKET MOVES AHEAD WHILE NIFTY CONSOLIDATES

BROADER MARKET MOVES AHEAD WHILE NIFTY CONSOLIDATES

WORLD MARKETS                             

US indices plunged 1.5%-2.4% with the Dow and S & P 500 closing at their lowest since mid-March and Nasdaq at its lowest since late February. Materials were the biggest laggards as dollar strengthened further.

Dollar index, after climbing more than 2% on Friday, gained further to close at 96.37, its highest in more than three months. Pound fell below Friday's lows to hit $1.3122, its lowest since September 1985. The People's Bank of China set the yuan's midpoint fix against the dollar at 6.6375, its weakest level since late 2010.

Rating agency S & P lowered UK's sovereign credit rating from "AAA" to "AA", citing last week's referendum.

US oil fell $1.31 or 2.8% to $46.33 a barrel.

In US economic news, the Markit flash services PMI for June came in unchanged from the prior month at 51.3.

European markets tumbled 1.8%-3.9%. Banking stocks were hit hard with Barclays down 17% and RBS off 15. Citigroup cut its price target and outlook on a number of Italian banking stocks, which have been under pressure because of their large portfolios of non-performing loans. Goldman Sachs lowered its U.K. and European car sales and production forecasts.

Earlier Asian markets closed mostly higher, with the Shanghai composite up 1.5% and Nikkei up 2.4%.

AT HOME

After Friday's massive volatility yesterday was a day of consolidation as benchmark indices ended little changed after trading in 1% range through the day. Sensex settled at 26403, up 5 points while Nify added 6 points to finish at 8095. BSE mid-cap and small-cap indices gained 0.8% and 1.5% respectively.  BSE Healthcare and Basic Materials indices climbed 2% and 1.9% respectively, becoming top gainers among the sectoral indices while IT and Teck indices tumbled 1.9% and 1.7% respectively, becoming top losers.

FIIs net sold stocks and index futures worth Rs 146 cr and 287 cr respectively but net bought stock futures worth Rs 61 cr. DIIs were net sellers to the tune of Rs 147 cr.

Rupee appreciated 1 paise to end at 67.95/$.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that 8150, the 61.8% retracement level of the recent 8286-7927 fall, is the immediate hurdle to eye while 7927, the low made on Friday, which also coincides with the 61.8% retracement level of the 7716-8295 upmove, is the immediate support. We had also advised trading light as far as Nifty is concerned till the volatility subsides.

The benchmark, after touching a high of 8121, eased to close flat at 8095 and is set to open lower today.

8150 continues to be immediate hurdle to eye a sustained trading above which would pave the way for the further upside till 8295. On the way down 7927 continues to be immediate support. We reiterate our advise of keeping trading volumes low till consolidation in this wide range is over and Nifty makes a fresh directional move.