NIFTY ACHIEVES 11300 TARGET; 11171 IS THE NEXT SUPPORT

NIFTY ACHIEVES 11300 TARGET; 11171 IS THE NEXT SUPPORT

WORLD MARKETS

US indices gained 0.4%-0.6% on the back of rebound in tech shares which offset lingering concerns over trade.

China will approach the WTO next week on 21st September to request for permission to impose sanctions on the U.S.

Energy stocks rose as US oil rose 2.5% to $69.25 and Brent surged 2.2% to $79.10 a barrel as the impending U.S. sanctions on Iran continued to weigh and the U.S. east coast braced for Hurricane Florence.

Small business optimism jumped to a record high last month, boosted by lower taxes and looser regulations.

In Europe, FTSE and DAX fell 0.1% each, Italy was down 0.3% while CAC rose 0.3%. ZEW Economic index showed that economic expectations in Germany rose slightly in the previous month despite some concerns over Turkey and Argentina.

AT HOME

Benchmark indices nosedived a percent and third, surpassing yesterday's meltdown and closing at the lowest level since 2nd August, 2018. Sensex lost 509 points to settle at 37413 while Nifty finished at 11287, down 150 points. BSE mid-cap and small-cap indices tumbled 1.4% each. All the BSE sectoral indices ended in red with Consumer Durable index leading the losses, down 2.5%, followed by 2.2% lower FMCG and Telecom indices.

FIIs net sold stocks, index futures and stock futures worth Rs 1454 cr, 1676 cr and 360 cr respectively. DIIs were net buyers to the tune of Rs 750 cr.

Rupee depreciated 24 paise to end at fresh record low of 72.69/$.

OUTLOOK

Today morning, Hang Seng and Nikkei are down half a percent each and Shanghai is off 0.2%. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had said that "11394, the bottom made last week, continues to be immediate support to eye, upon breach of which, 11300, the 38.2% retracement level of the entire 10557-11760 upmove, would be the next support".

The benchmark broke 11394 support and plunged all the way to 11274 before closing at 11287, achieving 11300 target and vindicating our view.

Having breached 11300 support, 11171-11160 is the next support zone to eye where 11171 is the top made in January and 11160 is the 50% retracement level of the 10557-11760 upmove.

34-DMA, now placed around 11450, would now act as a hurdle on the way up, until the crossover of which, short term bias will continue to be negative.

July IIP and August CPI data will be released today evening. August CPI is seen at 3.67%, down from previous month's 4.17% level. Core CPI too is expected to ease to 5.9% from 6.29%. July IIP is expected to come in at 6.7% as against 7% in June.