NIFTY EXTENDS CONSOLIDATION AROUND 8243 HURDLE; RBI IN FOCUS

NIFTY EXTENDS CONSOLIDATION AROUND 8243 HURDLE; RBI IN FOCUS

WORLD MARKETS                             

Dow gained 0.6% and S & P 500 and Nasdaq rose half a percent each after Fed chair Yellen, at an event in Philladelphia, struck a generally positive tone on the U.S. economy, warning markets against overreacting to the disappointing May jobs report released Friday. She insisted that the Fed needed to raise rates, but stepped back from giving a time frame for hikes. The S&P 500 closed at its highest since Nov. 3 and 1.1% below its 52-week intraday high set last July.

Energy jumped about 2% in its best day since April, as U.S. crude oil futures gained 2.2% or $1.07 to settle at $49.69 a barrel, their highest since July. Brent traded above $50 to hit a fresh high for the year so far.

The U.S. dollar index came off session lows to end at 94 as against Friday's close of 93.87.

European markets gained upto 1% with FTSE leading the tally. Mining stocks gained the most.

AT HOME

After a marginally higher start, benchmark indices saw a gradual downward drift through the day too end lower by a fourth of a percent. Sensex lost 66 points to settle at 26777 while Nifty ended at 8201, down 20 points. BSE mid-cap index lost 0.1% while the small-cap index rose 0.2%. BSE Telecom and Consumer Durable indices plunged 2% and 1.4% respectively, becoming top losers among the sectoral indices while Realty and Basic Material indices were the top gainers, up 0.8% and 0.6% respectively.

FIIs net bought stocks and index futures worth Rs 28 cr and 517 cr respectively but net sold stock futures worth Rs 637 cr. DIIs were net sellers to the tune of Rs 231 cr.

Rupee appreciated 29 paise to end at 66.96/$

OUTLOOK

Today morning Shanghai is flat but other Asian markets are trading with gains of upto a percent with Hang Seng leading and SGX Nifty is suggesting about 40 points higher start for our market.

After today's gap up opening, Nifty would be back in the vicinity of 8243 hurdle, which is the 61.8% retracement level of the entire 9119-6826 fall and a decisive crossover of which is required for the fresh upmove. 8336, the top made in October 2015, would be the immediate target in that case, followed by 8655, the top made in July 2015, which is also the 52-week high.

8130-8150 continues to be the support area, a breach of which can take the benchmark to 7980, the erstwhile resistance.

RBI, in its monetary policy review today, is widely expected to leave interest rate unchanged. The focus would be on RBI's comments on liquidity deficit, i.e. the situation of banks having to borrow funds from RBI's repo window. Markets will also watch out for any cues to Governor Rajan's tenure at RBI.