11430-11380 IS THE SUPPORT ZONE; 11630 ABOVE 11523

11430-11380 IS THE SUPPORT ZONE; 11630 ABOVE 11523

WORLD MARKETS

Nasdaq ended marginally in the red while Dow and S & P 500 gained a bit on Friday amidst reports that Trump instructed aides to proceed with tariffs on about $200 billion more of Chinese products. 

Financials rose as the benchmark 10-year note yield hit 3% for the first time since Aug. 2.

WTI oil settled up 40 cents at $68.99 a barrel while Brent dropped 5 cents a barrel to $78.12.

European markets gained 0.2%-0.6%.

For the week, US indices gained 0.9%-1.4% with Nasdaq on the top. In Europe, FTSE rose 0.4% while DAX and CAC climbed 1.4% and 1.9% respectively. In Asia, Nikkei was the star performer with 3.5% uptick, followed by 1.2% higher Hang Seng while Shanghai fell 0.8%.

After a volatile week, Brent posted a 1.7% weekly rise and WTI gained 1.9%.

AT HOME

Sensex and Nifty soared 1% and 1.3% respectively, extending the winning streak to second straight day. Sensex settled at 38090, up 372 points while Nifty added 145 points to finish at 11515. BSE Mid-cap and small-cap indices climbed 1.6% and 1.4% respectively. All the BSE sectoral indices ended in green with Realty index leading the tally, up 3.3%, followed by 2.7% higher Basic Materials index.

FIIs net bought stocks, index futures and stock futures worth Rs 1091 cr, 458 cr and 221 cr respectively. DIIs were net buyers to the tune of Rs 115 cr.

Rupee appreciated 34 paise to end at 71.85/$.

For the week, Sensex and Nifty lost 0.8% and 0.6% respectively, extending the losing streak to second straight week.

Finance Minister on Friday announced five decisions to increase dollar inflows into the country to fund and reduce the current account deficit (CAD). These include;

Mandatory hedging conditions for infrastructure loans through the external commercial borrowing (ECB) route will be reviewed and a 20% exposure limit on investments by foreign portfolio investors in debt to a single corporate group will be removed. Government will permit the manufacturing sector to access ECBs up to $50 million with residual maturity of one year instead of three years. Masala bonds will be exempted from withholding tax this financial year and Indian banks will be allowed to become market makers in masala bonds including by underwriting.

India's wholesale inflation eased to a 4-month low of 4.53% in August from 5.09% in July, driven by cheaper food items, especially vegetables. India’s trade deficit narrowed in August to $17.39 billion from a five-year high or $18 billion in July.

OUTLOOK

News reports over the weekend said the new tariffs by the US on China could come at 10% instead of 25%, and that Beijing could decline to participate in the trade talks if Washington pushed ahead with the new tariffs.

Owing to this news, Hang Seng and Shanghai are down 1.1% and 0.7% respectively and SGX Nifty is suggesting about 35 points lower start for our market.

In Friday's report we had said that 34-DMA, placed around 11460, was the immediate hurdle above which 11603, the top made on 7th September, would be the upside target to eye.

Nifty soared 145 points to finish at 11515, taking out the 11460 hurdle, but is set to open below 11500 today.

11430-11380, the gap created by the gap up opening on Friday, is the immediate support zone to eye.

11523, the top made on Friday, is the immediate hurdle, above which 11603, as mentioned above, would be the next target to eye.