9500 BELOW 9580; 9710 CONTINUES TO BE IMMEDIATE HURDLE

9500 BELOW 9580; 9710 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

While Dow gained 0.2%, S & P 500 and Nasdaq fell 0.1% and 0.4% after the Federal Reserve raised interest rates for the second time this year, as was widely expected.

Fed kept it's rate forecast unchanged and also provided more details on how it plans to reduce its massive $4.5 trillion balance sheet. However, the Fed now sees inflation falling short of expectations for the year.

U.S. Treasuries held higher after the Fed's announcement, with the benchmark 10-year yield sliding to 2.145%. Dollar index, after falling to 96.32, rebounded to close at 96.95.

Consumer price index fell 0.1% in May, as aginst expectation of a 0.2% rise. The Fed's preferred inflation measure, the PCE deflator, came in at a weaker 1.5%, well below the Fed's 2% inflation target.

WTI crude plunged 3.7% to touch a seven-month low after data showed surprise build in U.S. gasoline stocks

European markets, except a 0.3% higher DAX, fell 0.4%-0.1%.

AT HOME

After falling about three tenth of a percent, benchmark recouped all the losses and some more in the noon trade to end marginally higher. Sensex settled at 31156, up 52 points while Nifty added 11 points to finish at 9618. BSE mid-cap index ended flat while small-cap index added half a percent. BSE Energy and Realty indices climbed 1.5% each, becoming top gainers among the sectoral indices while Metal and FMCG indices were the top losers, down 0.7% each.

FIIs net sold stocks and stock futures worth Rs 161 cr and 310 cr respectively but net bought index futures worth Rs 150 cr. DIIs were net buyers to the tune of Rs 72 cr.

Rupee appreciated 4 paise to end at 64.29/$.

India's wholesale inflation sharply slowed to 2.17% during May from 3.85% in April.

OUTLOOK

Today morning, except a marginally higher Shanghai, other Asian markets are trading with cuts of 0.6%-1% and SGX Nifty is suggesting about 30 points lower start for our market.

As we have been mentioning, Nifty is in a consolidation mode after achieving 9700-9725 target and 9580-9590 is the immediate support area.

Nifty, after touching a low of 9580, rebounded to close at 9618, but a gap down opening would take it back to the 9580 support. 9580, which now also coincides with 20-DMA, is the immediate support, upon breach of which 34-DMA, placed around 9500, would be the next important support.

9710 continues to be immediate hurdle above which 9840 would be the next upside target to eye.