U.S. stocks closed higher on Friday after paring gains in late trading. All three major indexes rose this week. The three major indexes surged on Friday as “everything goes” continued on the back of strong inflation data. Stocks lost momentum in the final half hour of trading but still closed solidly higher. The Dow and the S&P 500 rose 1.6% and 0.9% respectively this week. The tech-heavy Nasdaq rose 0.2% for the week, its sixth consecutive gain and its longest winning streak since December, according to Dow Jones Market Data.
The U.S. Producer Price Index for June showed core prices were unchanged from the previous month, but economists surveyed by FactSet had expected a 0.2% increase. Composite prices rose 0.2%, beating expectations of a 0.1% increase.
Consumers expect inflation to slow over the coming year, but frustration with high prices caused optimism about the economy to fall to an eight-month low in July. The University of Michigan’s July consumer confidence index released Friday fell to 66.0 in July from 68.2 in June, the fourth consecutive decline and the lowest level since November.
India’s retail price inflation rose to 5.08% in June from 4.75%, the highest in four months, as a heat wave hit vegetables, sending food inflation surging to 9.4%.
Inflation fell to a 12-month low of 4.75% last month, even as food inflation remained at around 8.7%.
India’s industrial output rose to 5.9 percent in May, a seven-month high, from 5 percent the previous month, as manufacturing and power production surged, beating expectations, according to official data released on July 12. A CNBC-TV18 poll had expected IIP growth to be 4.6 percent, lower than reported a month ago. Power growth surged to 13.7 percent in May from 10.2 percent in April, while manufacturing, which accounts for nearly two-thirds of the index, rose to 4.6 percent in May from 3.9 percent.
China’s imports fell in June, missing expectations of a slight increase, but exports rose more than expected, customs data released on Friday showed. China’s imports fell 2.3 percent year-on-year in U.S. dollar terms in June, contrasting with expectations of a 2.8 percent increase in a Reuters poll. U.S. dollar-denominated exports rose 8.6 percent year-on-year in June, beating expectations of an 8 percent increase in a Reuters poll.
Analysts expect China’s upcoming Third Plenum to focus on areas such as high levels of local government debt and promoting advanced manufacturing. The highly anticipated policy conference, scheduled for Monday through Thursday, is a major gathering of China’s top Communist Party officials that usually takes place only once every five years. The plenary was widely expected to take place last fall but was postponed.
Chinese bank lending grew more slowly than expected in June and some key currency gauges fell to record lows, highlighting weak demand in the world’s second-largest economy as the country’s top leaders prepare to meet to outline long-term policy goals.
Financial markets opened the week with U.S. stock index futures slightly higher Sunday night as traders weighed the possibility of former President Donald Trump winning the U.S. presidential election following the assassination attempt that took place the previous day at a campaign rally for the president.
China’s central bank…
[9:18 am, 15/7/2024] +91 87791 76561: Today’s Market Morning Bulletin from Shrikant Chauhan, Head of Equity Research, Kotak Securities:
Benchmark indices showed positive momentum last week with Nifty rising 0.73% and Sensex up 522 points. Both the FMCG and IT sectors showed strong momentum registering gains of over 3%. However, the metals and real estate sectors came under selling pressure despite the overall market momentum.
Technically, after a range bound trading last Friday, Nifty has risen above the resistance zone of 24400/80100 indicating increased positive momentum after the breakout. For trend following traders, we believe 24400/80100 and 24350/79800 will be key support levels. On the higher highs, 24550-24600/80100-80200 will act as resistance zones. A close above 24650 could move the market towards 24900-25000/81000/81300. Conversely, a drop below 24350/79800 could signal a change in sentiment and a retest of 24150-24100/79500-79100 levels, which are key support zones for the last two weeks and 20-day SMA.
As for the strategy, we should reduce the weak long positions between 24550/24600 levels. We suggest buying around 24250/24200 and placing a stop loss at 24100 on a closing basis. We recommend waiting for a more serious correction before buying. Till then, keep an eye on the specific stock.
In the case of Bank Nifty, the 20-day SMA (Simple Moving Average) or 52100 will be the key levels to determine the trend. Staying above these levels can encourage a rise towards 52800-53500. Conversely, a drop below 52100 could weaken the uptrend and lead to a fall towards 51500 levels.
