8240 CONTINUES TO BE IMMEDIATE SUPPORT; 8655 MAJOR TARGET

8240 CONTINUES TO BE IMMEDIATE SUPPORT; 8655 MAJOR TARGET
WORLD MARKETS                             
US indices gained 0.4%-0.8% yesterday helped by rising oil prices, positive services sector data and the release of dovish Federal Reserve minutes.
Minutes showed that policymakers thought it was prudent to wait for more data and the Brexit vote result before raising rates, and cited a slowdown in hiring as a reason to keep rates unchanged last month.
US economic data showed  ISM non-manufacturing PMI came in at 56.5 for June versus 52.9 in May, the fastest pace in seven months. The U.S. trade deficit widened more than expected in May to $41.1 billion from $37.4 billion the prior month.
US oil rose 83 cents or 1.8% to $47.43 a barrel after falling more than 4.5% on Tuesday.
Global bond yields hit new record lows yesterday. The German 10-year bund fell to negative 0.204%, while the UK 10-year gilt dropped to 0.724%. Italy, Japan, and Switzerland’s government bond yields also hit new bottoms; Japan’s yield curve turned almost entirely negative, with the exception of the 30-year note, yielding about 0.045%. US 10-year Treasury yield came off its record low of 1.321% to trade near 1.38%. The safe haven buying was triggered by poor U.S. factory orders data from Tuesday, Chinese Premier Li Keqiang’s Monday remarks suggesting China may not maintain its 6.7% growth rate, and renewed fears over the fallout from the Brexit vote.
European markets fell 1.2%-2.3% amid continued political and economic uncertainty in the European Union (EU) following the Brexit vote. the British pound dropped to $1.2796, a fresh 31-year low.
Gold gained $8 to $1367 an ounce.
AT HOME
Benchmark indices ended lower by four tenth of a percent on Tuesday, breaking the six-day winning streak. Sensex lost 112 points to settle at 27167 while Nifty ended at 8336, down 35 points. BSE mid-cap and small-cap indices fell 0.1% each. BSE Utilities and Auto indices were the top losers among the sectoral indices, down 1.1% each. Metal and Capital Goods indices gained 0.4% each.
FIIs net bought stocks and index futures worth Rs 266 cr and 129 cr respectively but net sold stock futures worth Rs 345 cr. DIIs were net sellers to the tune of Rs 447 cr.
Rupee depreciated 19 paise to end at 67.46/$.
India’s services PMI fell to a seven-month low of 50.3 in June from 51 in May. The composite PMI edged up to 51.1 from 50.9.
Prime Minister Narendra Modi inducted 19 new faces in his Council of Ministers on Tuesday, including several dalit and OBC leaders. Minister for human resources, Smriti Irani, has been moved the textiles ministry. Prakash Javadekar took on Irani’s former portfolio. The minister of state for finance, Jayant Sinha, was shifted to civil aviation. Venkaiah Naidu took on charge of information and broadcasting ministry from Arun Jaitely. Piyush Goyal has been given an additional charge of mines ministry. Ravishankar Prasad has been made Law Minister.
OUTLOOK
Today morning, Nikkei and Shanghai are down modestly but other Asian markets are trading with gains of upto a percent with Hang Seng on the top. SGX Nifty is suggesting a flattish start for our market.
We have been working with major target of 8655 ever since 8243-8295 hurdle was taken out and have been advising holding on to trading longs with a trailing stop loss. That continues to be the view.

8240 continues to be the immediate support, which should serve as that stop loss.
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