11171 CONTINUES TO BE MAJOR UPSIDE TARGET; TRAIL STOP-LOSS TO 10825

11171 CONTINUES TO BE MAJOR UPSIDE TARGET; TRAIL STOP-LOSS TO 10825

WORLD MARKETS

US indices fell 0.6%-0.9%, with the Dow snapping 4-day winning streak, after the Trump administration unveiled new tariffs on Chinese goods.

Trump administration published late Tuesday a list of 10% duties on $200 billion worth of Chinese goods. The tariffs won’t come into effect immediately, but rather face a review process, with hearings taking place in mid-to-late August.

Oil nosedived sharply on trade war and supply concerns as Libya resolved a major disruption to its crude exports and Saudi Arabia reported a big jump in output for June. Brent crude fell $5.46 or 6.9% to $73.40, it's worst performance since February 2016 and WTI was down $3.73 or 5% at $70.38, the biggest daily drop since June 2017.

Boeing and Caterpillar, two companies with high overseas revenue exposure, fell 1.9% and 3.2% respectively. Chipmakers also pulled back.

Dollar strengthened and treasuries rose, with the benchmark 10-year yield trading at 2.85%.

Meanwhile, at the onset of two-day NATO summit, Trump said in Brussels that Germany is “totally controlled” by Russia.

European markets fell 1.3%-1.6%. Basic resources and Oil & Gas were the top losers.

AT HOME

It was a day of consolidation as benchmark indices ended little changed after trading in a narrow range through the session. Sensex settled at 36265, up 26 points while Nifty added 1 point to finish at 10948. BSE mid-cap and small-cap indices however lost 0.7% and 0.3% respectively. BSE IT and Teck indices soared 2.4% and 1.9% respectively, becoming top gainers among the sectoral indices while Metal index nosedived 3.1%, becoming top loser, followed by 1.7% lower Basic Material index.

FIIs net bought stocks, index futures and stock futures worth Rs 636 cr, 708 cr and 766 cr respectively. DIIs were net buyers to the tune of Rs 15 cr.

Rupee appreciated 5 paise to end at 68.77/$.

OUTLOOK

Today morning, Nikkei, Shanghai and Hang Seng are up 1%, 0.8% and 0.2% respectively. SGX Nifty is suggesting about 30 points higher start for our market.

After Nifty achieved 10930 target, we have been working with next major target of 11171, which was the top made in January.

Meanwhile, immediate support on the hourly chart has moved up to 10825, with the stop-loss of which, trading longs should be held on to.

June CPI will be out today and is expected to rise to 5.3% from 4.87% in May. Core is expected to inch up to 6.3% from 6.2%. May IIP growth is expected to slow down to 3.9% from 4.9% in April.