NIFTY RETREATS AFTER TESTING 9700-9725 TARGET AREA; 9590 IMMEDIATE SUPPORT

NIFTY RETREATS AFTER TESTING 9700-9725 TARGET AREA; 9590 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.2%-0.3%, looking ahead to ex-FBI Director James Comey's testimony and the UK general election.

 Comey is set to testify today before the Senate Intelligence Committee over whether U.S. President Donald Trump tried to intervene in a probe into former national security advisor Michael Flynn.

General election in the United Kingdom will be held today. While May is expected to emerge victorious, a Survation poll published last weekend placed her ruling right-wing Conservative Party ahead by just a single percentage point.

In economic news, US job openings hit a record high in April, according to the Job Openings and Labor Turnover Survey (JOLTS), which showed a total of 6.0 million openings.

The benchmark US 10-year note yield hit a low of 2.129%, its lowest since the days following the U.S. presidential election. Dollar index too hit a fresh seven-month low of 96.517. Gold prices hit their highest level in seven weeks.

European markets, except a 0.2% higher Italy, lost upot a percent, with DAX losing the most.  Retail sales in the euro zone rose slightly in April, the fourth consecutive monthly rise. Sentix investor sentiment index rose to 28.4 in June from 27.4 in May, hitting its highest level since nearly a decade.

AT HOME

After gaining about a third of a percent in the opening trade, benchmark indices tumbled about three fourth of a percent from the top of the day to end lower by four tenth of a percent. Sensex settled at 31190, down 119 points while Nifty lost 38 points to finish at 9637. BSE mid-cap and small-cap indices fell 0.6% each. Except a 2.3% and 1.6% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Consumer Durables and Power indices leading the tally, down 2% and 1.6% respectively.

FIIs net bought stocks worth Rs 61 cr but net sold index futures and stock futures worth Rs 199 cr and 146 cr respectively. DIIs were net sellers to the tune of Rs 360 cr.

Rupee depreciated 7 paise to end at 64.43/$.

Met Dept upgrades monsoon forecast from 96% to 98% of Long Term Average (Error Margin +/-4%).

OUTLOOK

Today morning, except a modestly lower Nikkei, other Asian markets are trading with modest gains and SGX Nifty is suggeting about 20 points higher start for our market.

Nifty yesterday touched a high of 9709, testing the 9700-9725 target area we have been working with ever since 9530 hurdle was taken out.

9709, the top made yesterday, is now the immediate hurdle above which 9800 would be the next target.

9590, the bottom made last week, is the immediate support, a breach of which will generate a sell on the hourly chart. 20-DMA, placed around 9520, would be the next downside target if that happens.

Traders are advised to keep a stop-loss of 9590 in longs.

RBI is widely expected to leave key rates unchanged but soften its hawkish stance amid slower economic growth and record-low inflation.