Friday, June 22, 2018

NIFTY RETREATS FROM THE VICINITY OF 10830 HURDLE; OPEC MEETING IN FOCUS


NIFTY RETREATS FROM THE VICINITY OF 10830 HURDLE; OPEC MEETING IN FOCUS

WORLD MARKETS

US indices fell 0.6%-0.9% on trade worries, with the Dow extending the losing streak to eight straight day.

Auto stocks fell following a profit warning from German car manufacturer Daimler, which said its bottom line could be affected by the U.S.-China trade tensions. Caterpillar and Boeing dropped 2.5% and 1.5% respectively.

Ahead of highly watched OPEC meeting WTI oil ended down 17 cents at $65.54, bouncing off a session low of $64.34 a barrel. Brent fell $1.69, or 2.3% to $73.05 a barrel. Markets are expecting the oil producers to ease production cuts that have been in place since 2017. Saudi Arabia's energy minister said the consensus was for output to be increased by one million barrels per day.

The Bank of England (BOE) held interest rates steady but the bank's chief economist joined two of the more hawish members of its monetary policy committee members in calling for a rate rise to 0.75%. Pound reacted by strengthening 0.7%.

European markets tumbled 0.9%-1.4%

AT HOME

Benchmark indices ended lower by three tenth of a percent after a choppy trade. Sensex lost 115 points to settle at 35432 while Nifty finished at 10741, down 31 points. BSE mid-cap and small-cap indices fell 0.5% and 0.8% respectively. Except 0.8% and 0.6% higher Energy and Oil & Gas indices respectively, all the BSE sectoral indices ended in red with Telecom index leading the losses, down 1.6%, followed by 1.1% lower Healthcare and Capital Goods indices.

FIIs net bought stocks and index futures worth Rs 1127 cr and 268 cr respectively but net sold stock futures worth Rs 106 cr. DIIs were net buyers to the tune of Rs 664 cr.

Rupee appreciated 9 paise to end at 67.98/$.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 35 points lower start for our market

After Nifty bounced back from 10700 support, in yesterday's report we had said that 10830, the top made on Monday, is the immediate hurdle, a crossover of which is required for a further upmove.

Nifty, after touching a high of 10810 in the initial trade, slipped to end at 10741 and is set to open around 10700 today.

10700 is where bottom made on Tuesday is palced while 50-DMA is placed around 10670 which makes 10700-10670 an important support zone. Below 10670, 10550, the bottom made in early June, would be the next support to eye.

10830 continues to be immediate hurdle above which 10900-10930 would the tougher resistance zone.

Thursday, June 21, 2018

NIFTY REBOUNDS AFTER TESTING 34-DMA SUPPORT; 10830 IS THE IMMEDIATE HURDLE


NIFTY REBOUNDS AFTER TESTING 34-DMA SUPPORT; 10830 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow fell 0.2% while S & P 500 and Nasdaq gained 0.2% and 0.7% respectively with the Nasdaq posting a record close and Dow down for the seventh straight day.

Nasdaq was supported by gains in Facebook and Netflix, which also hit record levels. Disney raised its bid for Twenty-First Century Fox to $38 per share, or $71.3 billion, surpassing an offer made by Comcast.

Federal Reserve Chair Jerome Powell said that the case for continued interest rate increases is "strong," citing solid economic growth and employment.

Media report suggested that the German automakers are proposing to terminate the European Union's import tax on U.S.-made cars.

US crude rose 1.8% to $66.22.

European markets, except 0.3% lower CAC, gained 0.1%-0.3%.

AT HOME

Sensex and Nifty gained 0.7% and 0.6% respectively to break two-day losing streak. Sensex added 260 points to settle at 35547 while Nifty finished at 10772, up 61 points. BSE mid-cap and small-cap indices gained 0.2% and 0.3% respectively. BSE Metal index gained 1.1%, becoming top gainer among the sectoral indices, followed by 1% higher Bankex, Energy and Finance indices. FMCG index was the top loser, down 0.4%, followed by 0.3% lower Capital Goods and Oil & Gas indices.

FIIs net sold stocks and index futures worth Rs 2443 cr and 1247 cr respectively but net bought stock futures worth Rs 575 cr. DIIs were net buyers to the tune of Rs 1474 cr.

Rupee appreciated 31 paise to end at 68.07/$.

OUTLOOK

Today morning, Asian markets are trading with modest gains but SGX Nifty is suggesting a marginally lower start for our market.

After testing 34-DMA support placed around 10700, Nifty yesterday rebounded to end at 10772. 10830, the top made on Monday, is the immediate hurdle, above which 10900-10930 region would be the bigger resistance zone.

Wednesday, June 20, 2018

NIFTY TESTS 10700 SUPPORT; 10800 IS THE IMMEDIATE HURDLE


NIFTY TESTS 10700 SUPPORT; 10800 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow tumbled 1.2% while S & P 500 and Nasdaq eased 0.4% and 0.3% respectively, with the Dow extending the losing streak to sixth straight day, after Trump threatened new tariffs against China. The Shanghai composite tumbled 3.82% and the Shenzhen composite fell 5.77%.

Trump, on Monday, said that he had asked the U.S. Trade Representative to identify $200 billion in Chinese goods that could be subject to additional tariffs. China said in response that it would take counter measures against the U.S. if it went ahead with issuing the list of extra tariffs.

U.S. Treasury prices rose with the yield on the 10-year U.S. Treasury note falling to 2.893%. Dollar index strengthened to 95. Commodities fell sharply with soybeans futures hitting their lowest prices in more than two years.

Main European markets fell 0.4%-1.2%.

AT HOME

Asian markets ended with deep cuts, spooked by US-China trade war concerns. Indian indices fell about eight tenth of a percent, extending the losing streak to second consecutive day. Sensex lost 261 points to settle at 35286 while Nifty finished at 10710, dwon 89 points. BSE mid-cap and small-cap indices tumbled 1% and 1.3% respectively. All the BSE sectoral indices ended in red with Metal and Energy indices leading the losses, down 1.7% each, followed by 1.6% lower Basic Material index.

FIIs net sold stocks, index futures and stock futures worth Rs 1325 cr, 710 cr and 282 cr respectively. DIIs were net buyers to the tune of Rs 654 cr.

Rupee depreciated 39 paise to end at 68.38/$, the weakest level since May 23.

The Bharatiya Janata Party (BJP) today pulled out of the alliance with the People’s Democratic Party (PDP) in Jammu and Kashmir (J&K).

The government has decided not to go ahead with Air India stake sale in an election year and will provide required funds for its operations.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that "On the way down, 10755, the low made last week, is the immediate support below which, 10700, where 34-DMA is placed, would be the important support to eye".

Nifty broke 10755 and fell all the way to 10701 and closed at 10710.

10700 continues to be important immediate support to eye below which 10650, where a trendline adjoining bottoms made in March and May is placed, would be the next support to eye.

10800 is the immediate hurdle, a crossover of which is required for a further upmove.

Tuesday, June 19, 2018

US-CHINA TRADE WAR INTENSIFIES; 10700 KEY SUPPORT BELOW 10755


US-CHINA TRADE WAR INTENSIFIES; 10700 KEY SUPPORT BELOW 10755

WORLD MARKETS

While Nasdaq ended flat, Dow and S & P 500 fell 0.4% and 0.2% respectively on US-China trade war concerns. Dow extended the losing streak to fifth straight day.

On Friday, Trump announced that the U.S. would impose a 25% tariff on up to $50 billion of Chinese products. Tariffs on an initial list of goods worth some $34 billion will kick in on July 6. In response, China announced tariffs on the same total value of products, with duties on $34 billion of U.S. goods expected to be implemented in July.

Treasury prices gained on safe haven buying with the benchmark 10-year yield at 2.92%, while the short-term two-year yield declined to 2.54%.

US crude rose 1.2% to $65.85 and Brent gained $1.90 to $75.34 on reports that oil producers were discussing a smaller-than-expected increase in production.

In Europe, FTSE ended flat while other markets fell 0.4%-1.4%.

AT HOME

Benchmark indices ended lower by a fifth of a percent after a rangebound session. Sensex lost 74 points to settle at 35548 while Nifty finished at 10780, down 18 points. BSE mid-cap and small-cap indices fell 0.2% and 0.8% respectively.  BSE Metal and Basic Material indices were the top losers, down 1.7% and 1.2% respectively while Oil & Gas and Energy indices were the top gainers, up 1.2% and 0.5% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 754 cr, 576 cr and 158 cr respectively. DIIs were net buyers to the tune of Rs 824 cr.

Rupee appreciated 2 paise to end at 67.98/$.

OUTLOOK

Trump, late yesterday, said that he had asked the U.S. Trade Representative to identify $200 billion worth of Chinese products that will be subject to additional tariffs of 10%.

Hang Seng and Shanghai are down nearly a percent and half owing to this news. Nikkei is down 0.3% and SGX Nifty is suggesting about 50 points lower start for our market.

Nifty, after achieving 10870 target last week, has been in a consolidation mode. 10893, the top made last week, is the immediate hurdle, a crossover of which is required for a fresh upmove.

On the way down, 10755, the low made last week, is the immediate support below which, 10700, where 34-DMA is placed, would be the important support to eye.

Monday, June 18, 2018

10755-10893 IS THE IMMEDIATE RANGE


10755-10893 IS THE IMMEDIATE RANGE

WORLD MARKETS

US indices fell 0.1%-0.3% after the Trump administration said it will impose a 25% tariff on up to $50 billion in Chinese goods.

Trump also said the U.S. would impose more tariffs on Chinese goods if China retaliates with duties of its own on American products. China promptly responded saying it will implement tariffs on the same scale as the U.S.

Treasury yield fell, with the benchmark 10-year note yield at 2.93%. The short-term two-year note yield also slipped to 2.55%.

Oil tumbled with WTI down $1.83 or 2.7% to $65.06 and Brent off $2.46 or 3.2% to $73.48 a barrel after Russian Energy Minister said his country and Saudi Arabia supported a gradual increase in production after restricting output for 18 months.

European markets fell 0.5%-1.7% with FTSE leading the losses.

AT HOME

After falling about half a percent, benchmark indices recouped all the losses and some more in late noon rebound to end marginally higher. Sensex settled at 35622, up 22 points while Nifty added 10 points to finish at 10817. BSE mid-cap and small-cap indices however ended lower by 0.4% and 0.5% respectively. BSE IT index soared 2.2%, becoming top gainer among the sectoral indices, followed by 1.9% higher Healthcare index. Metal and Realty indices were the top losers, down 1.5% and 1.2% respectively.

FIIs net sold stocks worth Rs 1525 cr but net bought index futures and stock futures worth Rs 604 cr and 385 cr respectively. DIIs were net buyers to the tune of Rs 561 cr.

Rupee depreciated 39 paise to end at 68.01/$.

For the week, Sensex and Nifty gained half a percent, extending the winning streak to fourth straight week.

India's trade deficit in May widened to $14.6 bn from $13.72 bn in April. Imports rose 14.9% y-o-y to $43.5 bn and exports rose 20.2% to $28.9 bn.

OUTLOOK

Markets in China, Hong Kong, Taiwan and Indonesia are closed today for holidays. Nikkei is down 0.6%. SGX Nifty is suggesting about 40 points lower start for our market.

Last week, after achieving the 10870 target on Wednesday, Nifty eased to touch a low of 10755 on Friday from where it rebounded to end the week at 10817.

10755, the bottom made last week, is the immediate support below which 34-DMA, placed around 10700 would be the next support to eye. 10893, the top made last week, is the immediate hurdle above which 10930, the top made in May, would be the next hurdle to eye.

Friday, June 15, 2018

NIFTY REBOUNDS AFTER TESTING 10775 SUPPORT


NIFTY REBOUNDS AFTER TESTING 10775 SUPPORT

WORLD MARKETS

Dow fell 0.1% while S & P 500 and Nasdaq rose 0.2% and 0.8% respectively with Nasdaq hitting a record high as dealmaking activity lifted technology and media shares.

Bank stocks fell after the ECB said it would hold off on raising rates until next year, sending treasury yields lower. The benchmark 10-year yield fell to 2.94%.

US retail sales rose 0.8% in May, well above estimate of 0.4% and marking the biggest gain since November. Weekly jobless claims fell to a near 44½-year-low last week

US crude rose 25 cents to settle at $66.89 while Brent fell 80 cents to $75.94 a barrel.

The ECB said its current 30 billion euros in monthly purchases would be halved to 15 billion euros in the last three months of the year. In addition, the central bank indicated that a rate hike would be unlikely before the summer of 2019. The euro tanked after the ECB announcement to trade near $1.15 from levels above $1.18 seen before the central bank's announcement.

European markets climbed 0.8%-1.4%.

AT HOME

Benchmark indices fell about four tenth of a percent, breaking 3-day winning streak. Sensex lost 139 points to settle at 35600 while Nifty finished at 10808, down 48 points. BSE mid-cap index fell 0.1% while small-cap index rose 0.1%. BSE IT and Consumer Durable indices fell 1.4% and 0.9% respectively, becoming top losers among the sectoral indices while Healthcare index soared 1.5%, becoming top gainer, followed by marginally higher Auto, Energy and Consumer Discretionary Goods & Services indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1373 cr, 1304 cr and 675 cr respectively. DIIs were net buyes to the tune of Rs 576 cr.

Rupee appreciated 2 paise to end at 67.62/$.

India's wholesale inflation grew 4.43% in May, up from 3.18% in April and hitting a 14-month high, driven by some food items and fuel prices.

OUTLOOK

Today morning, Nikkei is up 0.3% while Shanghai and Hang Seng are flat. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had said that 10930, the top made in May, is an important resistance to eye and had advised keeping a stop-loss of 10775 in long positions.

Nifty, after touching a low of 10773, recovered to end at 10808 and is set to open below 10800 today. 10773, the low made yesterday, continues to be immediate support below which 34-DMA, placed around 10700, would be the next important support to eye.

Thursday, June 14, 2018

NIFTY RETREATS AFTER ACHIEVING 10870 TARGET; TRAIL STOP-LOSS TO 10775


NIFTY RETREATS AFTER ACHIEVING 10870 TARGET; TRAIL STOP-LOSS TO 10775

WORLD MARKETS

US indices fell 0.1%-0.5% after digesting Fed decision and comments.

The Federal Reserve hiked interest rates 25 basis points as widely expected, but suggested two more increases are likely this year. The Fed changed several phrases from its prior memos, citing more optimistic economic growth and higher inflation expectations. According to the Fed's dot plot, which tracks participant expectations for interest rates, members now expect four hikes this year, up from the three previously expected.

U.S. Treasury yields rose with the yield on the benchmark 10-year note crossing the 3%, before retreating back to 2.977%. The two-year Treasury note yield hit its highest level since 2008. The dollar index initially rose above 94 before backing off to 93.57.

WTI crude rose 28 cents to $66.64 after U.S. commercial crude inventories fell by 4.1 million barrels in the week to June 8.

In Europe, FTSE and CAC were flat while DAX and Italy gained 0.4% each.

AT HOME

After gaining about half a percent, benchmark indicess slipped in late noon trade to end higher by just 0.1%. Sensex settled at 35739, up 46 points while Nifty added 14 points to finish at 10856. BSE mid-cap and small-cap indices fell 0.5% and 0.2% respectively. BSE IT and Teck indices climbed 1.3% and 0.9% respectively, becoming top gainers among the sectoral indices while Telecom index was the top loser, down 1.3%, followed by 0.7% lower Capital Goods index.

FIIs net sold stocks and index futures worth Rs 71 cr and 297 cr respectively but net bought stock futures worth Rs 88 cr. DIIs were net buyers to the tune of Rs 487 cr.

Rupee depreciated 16 paise to end at 67.64/$.

The Union Cabinet yesterday approved foreign direct investment (FDI) worth Rs 24,000 crore for HDFC Bank.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-0.4% and SGX Nifty is suggesting about 30 points lower start for our market.

At the risk of repeating, we had been working with target of 10870, where a trendline adjoining tops made in January and May is placed, after 10770 hurdle was taken out.

Nifty yesterday touched a high of 10893 before closing at 10856, achieving this target and vindicating our view.

After a good run up since late May, Nifty is now close to 10930 mark, which was the top made in May and is also the immediate previous top on the weekly chart and hence an important resistance to eye. Upon crossover of 10930, 11171, the top made in January, would be the next target to eye.

10775 is the immediate support on the hourly chart, with the stop-loss of which, trading longs should be held on to.