NIFTY RESISTED NEAR 10138 AS EXPECTED; IMMEDIATE SUPPORT MOVES UP TO 9920

NIFTY RESISTED NEAR 10138 AS EXPECTED; IMMEDIATE SUPPORT MOVES UP TO 9920

WORLD MARKETS                             

US indices gained 0.1%-0.2%, notching fresh record highs, as a gain in the energy sector offset losses in tech.

Brent crude rose 89 cents to $55.16 a barrel and U.S. crude added $1.07 to settle at a five-week high of $49.30 after the International Energy Agency said the oversupply of crude was beginning to shrink.

President Trump tweeted that "the biggest Tax Cut & Tax Reform package in the history of our country will soon begin. Move fast Congress!"

Optimism over tax reform led to yields of the 10-year U.S. Treasury note rising to 2.19%. Dollar index rose about half a percent to 92.40.

U.S. producer prices rose 0.2% in August, which was lower-than-expected.

European markets, except a 0.3% lower FTSE, ended flat to modestly higher.

AT HOME

After gaining about four tenth of a percent, benchmark indices gave away all the gains in the late noon plunge to end flat to marginally lower. Sensex settled at 32186, up 28 points while Nifty lost 14 points to finish at 10079. BSE mid-cap and small-cap indices lost 0.7% and 0.6% respectively. BSE Oil & Gas and Metal indices plunged 1.7% and 1.1% respectively, becoming top losers among the sectoral indices while Healthcare index soared 1.2%, becoming top gainer, followed by 0.2% higher Energy index.

FIIs net sold stocks and index futures worth Rs 827 cr and 532 cr respectively but net bought stock futures worth Rs 63 cr. DIIs were net buyers to the tune of Rs 726 cr.

Rupee ended at 63.99/$, appreciating 3 paise compared to previous close.

OUTLOOK

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

Readers would recall that after Nifty crossed the immediate hurdle of 9980-10000, we were working with target of 10138, the highest high so far made on 2nd August. In yesterday's report we had also said that some profit booking in trading longs is advisable as 10138 approaches.

Yesterday, Nifty, after touching a high of 10132, slipped to end at 10079, vindicating our view.

A decisive crossover of 10138 is required for a fresh upmove. An upside till about 10600 would open up if that happens.

The upward sloping trendline adjoining recent bottoms on the daily chart, which also coincides with 20-DMA, has now moved up to 9920, which should serve as stop-loss for remaining long positions.

August WPI will be out today and is expected to show a reading of 3.07%, up from 1.88% in July.