11340, 11250 ARE DOWNSIDE SUPPORTS; 11523 IMMEDIATE HURDLE

11340, 11250 ARE DOWNSIDE SUPPORTS; 11523 IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 fell 0.4% and 0.6% respectively while Nasdaq plunged 1.4%, after Trump said an announcement on U.S.-China trade will be coming after the close. China's foreign ministry, meanwhile, stated China would retaliate in kind to the U.S. if it initiates fresh tariffs.

In a tweet, Trump said that tariffs have "put the U.S. in a very strong bargaining position," adding: "If countries will not make fair deals with us, they will be 'Tariffed!'"

In Europe, FTSE and CAC ended marginally lower, DAX was down 0.2% while Italy and Spain rose 1% and 0.4% respectively.  Euro zone annual inflation slowed slightly to 2% in August from 2.1% in July, confirming an earlier estimate.

Later on White House announced 10% tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25% at the end of the year.

AT HOME

After a gap down opening, Sensex and Nifty drifted further lower through the session to end with deep cuts of 1.3% and 1.2% respectively. Sensex lost 505 points to settle at 37585 while Nifty finished at 11377, down 137 points. BSE mid-cap and small-cap indices fell 0.8% and 0.05% respectively. BSE Finance and Energy indices tumbled 1.4% and 1.3% respectively, becoming top losers among the sectoral indices while Realty index soared 1.4%, becoming top gainer, followed by 0.1% higher Power index.

FIIs net sold stocks, index futures and stock futures worth Rs 107 cr, 617 cr and 729 cr respectively. DIIs were net sellers to the tune of Rs 180 cr.

Rupee depreciated 66 paise to end at 72.51/$.

Government, yesterday evening, announced the proposal to merge three public sector lenders - Bank of Baroda, Dena Bank and Vijaya Bank.

OUTLOOK

Today morning, Nikkei is up 0.5% while Hang Seng and Shanghai are down 0.8% and 0.1% respectively. US futures are down about three tenth of a percent. SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that 11523, the top made on Friday, is the immediate hurdle while 11430-11380, the gap created by the gap up opening on Friday, is the immediate support zone to eye.

Nifty, touched a low of 11367 and closed at 11377, breaking below above mentioned support one and is set to open around 11350 today.

11340, the 67% retracement level of the recent 11250-11523 upmove, is the next support to eye below which 11250, the bottom made last week, would be the next important support to eye.

On the way up, 11523, the top made on Friday, continues to be immediate hurdle above which 11603 would be the next important hurdle to eye.