GDP, CORE SECTOR GROWTH ACCELERATE; AUTO SALES IN FOCUS

GDP, CORE SECTOR GROWTH ACCELERATE; AUTO SALES IN FOCUS

WORLD MARKETS                             

Dow and S & P 500 fell 0.5% and 0.1% respectively while Nasdaq gained 0.3% yesterday following disappointing reads on consumer confidence and regional manufacturing.

The Chicago PMI came in below expectations and in contraction territory at 49.3 in May. The Dallas Fed manufacturing index declined from minus 13.9 to minus 20.8 in May. Consumer confidence was 92.6 in May, down from 94.7 in April. On the other hand, personal spending increased 1% in April, the biggest gain in more than six years. Personal income rose 0.4%.

US oil settled down 23 cents or 0.5% at $49.10 a barrel ahead of Thursday's OPEC meeting. Brent was at $49.89.

European markets lost 0.6%-1.4%.

Earlier Shanghai Composite surged 3.3% following news Goldman Sachs increased the probability of inclusion of mainland Chinese A shares in its global indices to 70%. The decision is expected June 14.

AT HOME

It was time to digest heady gains made in past five days as benchmark indices fell a fifth of a percent in today's trade. Sensex lost 58 points to settle at 26668 while Nifty finished at 8160, down 18 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Auto index climbed 2.3%, becoming top gainer among the sectoral indices, followed by 1.7% rise in Industrial index. Telecom and Healthcare indices were the top losers, down 1.4% each.

FIIs net sold stocks and stock futures worth Rs 115 cr and 254 cr respectively but net bought index futures worth Rs 599 cr. DIIs were net buyers to the tune of Rs 60 cr.

Rupee depreciated 10 paise to end at 67.26/$.

India's March quarter GDP growth accelerated to 7.9% as against a revised 7.2% in December 2015. Q4 GVA growth stood at 7.4% as against 6.9% in the December quarter. For FY16, GDP growth accelerated to 7.6% against 7.2% in the previous fiscal. FY16 fiscal deficit stood at 5.32 lakh cr or 3.92% of GDP.

India's core sector grew at 8.5% in April, its fastest pace in 17 months. In March, the growth was 6.5%. 

Oil Marketing Companies hiked petrol and diesel price by Rs 2.58/litre and 2.26/litre respectively.

OUTLOOK

China's official manufacturing PMI for May has come in at 50.1, unchanged from April while the services PMI has slowed to 53.1 from 53.5. The Caixin manufacturing PMI however has slowed to 49.2 from 49.4, contracting for the 15^th straight month.

Nikkei is down about 0.7%, Shanghai is flat and Hang Seng is modestly higher. SGX Nifty is suggesting about 20 points higher start for our market.

Ever since Nifty crossed 7980 hurdle, we have been working with major upside target of 8243, which is the 61.8% retracement level of the entire 9119-6825 fall.

Yesterday, the benchmark, after touching a high of 8214, slipped to close at 8160.

8243 continues to be important hurdle to eye, a decisive crossover of which is required for fresh upmove.

On the way down, 8020, the 38.2% retracement level of the recent 7716-8214 upmove, is the immediate support.

India's May manufacturing PMI will be released today. Auto companies will report May sales figures.