NIFTY REBOUNDS AFTER TESTING 34-DMA; 11600 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER TESTING 34-DMA; 11600 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.1% while S & P 500 and Nasdaq fell 0.3% and 1.2% respectively. Nasdaq had its worst day since August 15.

Tech shares fell as Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg testified in front of Congress, addressing online election meddling and how to stop abuse on social platforms.

U.S. and Canadian officials resumed talks yesterday to try and settle differences and secure a future deal on trade.

WTI oil fell 1.5% to $68.72 and Brent fell 91 cents to $77.26 a barrel after a U.S. Gulf storm weakened and moved away from oil-producing areas, and on mounting concerns about global trade disputes and Turkey's currency crisis hurting demand.

Main European markets tumbled 1%-1.5%. British pound shot up 0.8% following the news that the U.K. and Germany have dropped key Brexit demands, a move which would ease negotiators on both sides into striking a deal.

AT HOME

After falling nearly a percent, benchmark indices staged a smart comeback in last hour or so to end lower by a fourth of a percent. Sensex settled at 38018, down 140 points while Nifty lost 43 points to finish at 11476. BSE mid-cap and small-cap indices fell 0.6% and 0.5% respectively. BSE Telecom and Consumer Durable indices tumbled 2.2% and 1.8% respectively, becoming top losers among the sectoral indices while Metal index climbed 1.1%, becoming top gainer, followed by 0.7% higher Healthcare index.

FIIs net sold stocks, index futures and stock futures worth Rs 384 cr, 2328 cr and 315 cr respectively. DIIs were net buyers to the tune of Rs 177 cr.

Rupee depreciated 17 paise to end at 71.75/$.

India's Nikkei services PMI fell to 51.5 in August from a 21-month high of 54.2 in July. Composite PMI eased to 51.9 from 54.1.

OUTLOOK

Today morning, Nikkei is down 0.3%, Hang Seng is marginally in the red while Shanghai is up 0.3%. SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had said that "11500-11486 continues to be immediate support zone, upon breach of which, 34-DMA, placed around 11400, would be the next crucial support to eye".

Nifty yesterday plunged to 11393, achieving the 34-DMA target mentioned above, from where it rebounded smartly to end at 11476.

11394, yesterday's low, which coincides with 34-DMA, continues to be important support to eye. If that gives way, 11300, the 38.2% retracement level of the 10557-11760 upmove, would be the next support to eye.

11600 is the immediate hurdle on the hourly chart above which, 11760, the top made last week, would be the tougher resistance to eye.