NIFTY RETREATS AFTER ACHIEVING 10470 TARGET; 10270 IS THE IMMEDIATE SUPPORT

NIFTY RETREATS AFTER ACHIEVING 10470 TARGET; 10270 IS THE IMMEDIATE SUPPORT

WORLD MARKETS

US indices fell 0.6%-1% yesterday after U.S. Secretary of State Rex Tillerson was fired by President Trump and amid concerns that trade tensions between the U.S. and China could increase.

Stocks opened higher after data showed consumer prices rose 0.2% last month, meeting forecasts and easing concerns about tighter monetary policy due to inflationary pressures.

Qualcomm fell 5% after President Trump shut down Broadcom's proposed buyout of Qualcomm, citing concerns based on national security. This raised concerns of trade war with China.

Also fueling the fire was was news that the Trump administration was looking into a tough trade package, which could include indefinite tariffs and investment restrictions, against China

European markets tumbled 0.6%-1.6%. Basic resources however rose on strong metal prices.

AT HOME

After gaining more than half a percent, benchmark indices slipped in late noon trade to end flat to modestly lower. Sensex settled at 33857, down 61 points while Nifty finished 5 points higher at 10427. Broader market however outperformed, rising 1% and 1.1% respectively. BSE Telecom and Realty indices climbed 1.7% and 1.6% respectively, becoming top gainers among sectoral indices while IT and Teck indices were the top losers, down 1.6% and 1.1% respectively.

FIIs net bought stocks and stock futures worth Rs 7028 cr (which includes Rs 9300 cr on account of TCS stake sell) and 165 cr respectively but net sold index futures worth Rs 242 cr. DIIs were net buyers to the tune of Rs 1613 cr.

Rupee appreciated 15 paise to end at 64.90/$.

TCS tumbled after Tata Sons sold a 1.48% stake in the company at a discount of between 4.17% and 5.9% to the stock’s closing price on Monday.

PNB has told that it has uncovered additional exposure of about Rs 942.18 crore (USD 145.27 million) to Asmi Jewellery of Gitanjali Group, taking its exposure to Rs 13640 cr in Nirav Modi fraud.

In a remedial action to the Nirav-Modi led Punjab National Bank fraud, the Reserve Bank of India has discontinued use of LoUs or Letters of Undertaking and Letters of Comfort as trade credits.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.4%-1.2% and SGX Nifty is suggesting about 30 points lower start for our market.

After Nifty crossed immediate hurdle of 10370, we had given target of 10470, which is the two-third retracement level of the recent 10631-10141 fall.

Nifty touched a high of 10478 yesterday, achieving this target and vindicating our view. The benchmark closed at 10426 and is set to open below 10400 today.

10470, the 67% retracement level of the 10631-10141 fall, is the immediate hurdle to eye, a decisive crossover of which is required for a fresh upmove. 10535 followed by 10631 would be subsequent upside targets if that happens.

Meanwhile, 10270 continues to be immediate support, a breach of which will generate a sell on the hourly chart and would pave the way for further correction. 10140 would be the next downside target and support if that happens.