10088, 10138 ARE THE UPSIDE TARGETS; 9880 IMMEDIATE SUPPORT
US indices soared 1.1%-1.2% yesterday, with the S & P 500 at record close, as concerns over Irma and North Korea ebbed.
Hurricane Irma, originally a Category 5 hurricane, was downgraded to a tropical storm as it moved inland and the damage caused by it was less than originally thought.
Markets were also relieved after there was no further missile test by North Korea over the weekend. The United Nations Security Council voted to increase sanctions against North Korea yesterday which included a limit on the amount of crude oil imported by the country.
Dollar rose while Gold and US treasury sold-off on these developments. Dollar index rose about half a percent to 91.90 and yields of the 10-year U.S. Treasury note rose 8 basis points to 2.13% after falling to their lowest levels since November last week. Gold fell 1.2% to $1336 per ounce.
U.S. crude jumped 1.2% to settle at $48.07 a barrel while Brent rose 0.1% to $53.84 a barrel as refineries on the U.S. Gulf Coast began to resume operations after a shutdown due to Hurricane Harvey.
European markets gained 0.5%-1.9%. Insurance stocks led the gains after the projected insured loss in the U.S. resulting from Hurricane Irma was cut to between $20 billion and $40 billion.
After climbing just under a percent, benchmark indices cooled off in last half an hour to end higher by about seven tenth of a percent. Sensex added 195 points to settle at 31882 while Nifty finished at 10006, up 71 points. BSE mid-cap and small-cap indices gained 0.7% and 0.8% respectively. BSE Capital Goods and Power indices added 2.6% and 1.9% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.1% each.
FIIs net sold stocks and index futures worth Rs 393 cr and 247 cr respectively but net bought stock futures worth Rs 165 cr. DIIs were net buyers to the tunes of Rs 877 cr.
Rupee depreciated 15 paise to end at 63.93/$.
Indusind Bank surged after the company entered into an exclusivity agreement with Bharat Financial to evaluate possibility of a strategic deal between the two.
Today morning, Asian markets are trading with gains of upto a percent with Nikkei on the top and SGX Nifty is suggesting about 40 points higher start for our market.
In yesterday's report we had mentioned that an upward sloping trendline adjoining tops made in mid-August and early September presents a resistance around 10000, above which 10088 and 10138 would be next upside targets to eye.
The benchmark touched a high of 10028 before closing at 10006. 10088 followed by 10138, the tops made in early August, are the next upside targets to eye.
The upward sloping trendline adjoining recent bottoms on the daily chart, which also coincides with 20-DMA, is now placed around 9880 and is the immediate support with the stop-loss of which, existing longs should be held on to.
July IIP will be released today and is expected to show a growth of 1.3% as against contraction of 0.1% in June. August CPI is expected to rise to 4.26% from 2.36% in July.