10770-10630 CONTINUES TO BE IMMEDIATE RANGE
After falling more than a percent in the first half, US indices recouped most of the losses later to end flat to modestly lower. Dow ended flat while S & P 500 and Nasdaq lost 0.2% each.
The lower start was on the back of trade and geopolitical worries. Media reports suggested that the U.S. administration is considering taking executive action to restrict some Chinese firms' ability to sell telecoms equipment.
Iran Foreign Affairs Minister said the country will not renegotiate the nuclear deal it struck with the U.S. in 2015.
News regarding Trump's legal troubles also contributed to the pressure. In an interview, Rudy Giuliani, Trump's lawyer, said the president repaid his personal lawyer Michael Cohen for a hush payment to porn star Stormy Daniels.
Gold futures jumped 0.5% to settle at $1,312.70 per ounce.
Oil rose slightly with Brent up 0.23% to $73.79 a barrel and WTI up 0.2% at $68.53 a barrel.
European markets fell 0.5%-0.9%. Euro zone inflation unexpectedly declined in April, raising questions about the European Central Bank's plan to scale back its stimulus program. The European Commission said in its spring economic forecast that growth was set to remain strong this year and ease slightly into 2019, and that the economy was more exposed to external risks like volatility in the markets.
Sensex and Nifty fell 0.2% and 0.4% respectively to extend the losing streak to second straight day. Sensex lost 73 points to settle at 35103 while Nifty finished at 10680, down 38 points. BSE mid-cap and small-cap indices underperformed yet again, losing 1.2% and 0.8% respectively. BSE Realty index tumbled 1.8%, becoming top loser among the sectoral indices, followed by 1.6% lower IT and Capital Goods indices. Metal index and Bankex were the top gainers, up 0.8% and 0.2% respectively.
FIIs net sold stocks worth Rs 148 cr but net bought index futures and stock futures worth Rs 578 cr and 74 cr respectively. DIIs were net sellers to the tune of Rs 579 cr.
Rupee appreciated 2 paise to end at 66.65/$.
Vedanta posted an 81% surge in quarterly profit at Rs 4802 cr., helped by higher volumes and favourable commodity prices. Revenue rose 23% to Rs 27630 cr.
Today, Nikkei is shut while Hang Seng and Shanghai are modestly lower. SGX Nifty is suggesting about 30 points lower start for our market.
In yesterday's report we had reiterated the view that 10770, the two-third retracement level of the entire 11171-9951 fall, is the important immediate hurdle, a crossover of which is required for a fresh upmove. We had also said that 10650-10630 is the immediate support zone, with the stop-loss of which, existing longs should be held on to.
Nifty, after touching a low of 10647, rebounded to end at 10680 and is set to open around 10650 today.
10650-10630 continues to be immediate support zone to eye, a breach of which will generate a "Sell" on the hourly chart and would pave the way for further correction. 10500 would be the next downside target if that happens.
10770 continues to be hurdle on the way up.
Traders are advised to keep stop-loss of 10630 in longs.