NIFTY REBOUNDS FROM 10866-10770 SUPPORT ZONE; 11145 IS IMMEDIATE HURDLE

NIFTY REBOUNDS FROM 10866-10770 SUPPORT ZONE; 11145 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow and Nasdaq gained marginally while S & P 500 ended flat on Friday.

Consumer spending rose 0.3% in August while the personal consumption expenditures (PCE) price index minus food and energy was unchanged for the month of August.

US oil rose 1.6% to $73.25 and Brent futures rose $1, or 1.2% to $82.72 as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production.

Main European markets fell 0.5%-1.5% while Italy plunged 3.7% after the Italian government set a budget deficit target that is three times higher than the previous government had planned.

Euro area inflation increased to 2.1% in September, but that core inflation disappointed, falling to 0.9%. The euro fell over half a percent versus the dollar to $1.1576.

AT HOME

After a rollercoaster day of trade, Sensex and Nifty ended lower by 0.3% and 0.4% respectively, extending the losing streak to third straight day and closing at the lowest level since 9th July 2018. Sensex fell 97 points to settle at 36227 while Nifty finished at 10930, down 47 points. BSE mid-cap and small-cap indices nosedived 1.6% and 3.4% respectively to close at the lowest level since 10th August 2017 and 30th March 2017 respectively. BSE Metal and Realty indices collapsed 5% and 4.8% respectively, becoming top losers among the sectoral indices while Oil & Gas and FMCG indices gained 0.1% each.

FIIs net sold stocks worth Rs 1700 cr but net bought index futures and stock futures worth Rs 702 cr and 874 cr respectively. DIIs were net buyers to the tune of Rs 3256 cr.

Rupee appreciated 11 paise to end at 72.48/$.

For the week, Sensex and Nifty lost 1.7% and 1.9% respectively, extending the losing streak to fourth straight week.

At a meeting held over the weekend, IL&FS shareholders approved company's plans to raise as much as Rs 15,000 crore through a non-convertible debt issue, hike the firm’s borrowing limit by 40% to Rs 35,000 crore and increase its share capital to enable a rights offering,

Government, on Friday said it will borrow Rs 2.47 lakh crore via bonds in the second half of the financial year, cutting the market borrowing by Rs 70,000 crore. The market was anticipating a borrowing of Rs 2.68 lakh crore.

OUTLOOK

Data released yesterday showed the Caixin/Markit Manufacturing PMI fell to 50.0 in September from 50.6 in August.

The Chinese and Hong Kong markets are closed today.  Nikkei is up about half a percent and SGX Nifty is suggesting about 15 points higher start for our market.

For past couple of sessions, we have been mentioning that 10866-10770 is the crucial support zone as 10866 is where trendline adjoining bottoms made in December 2016 and March 2018 is placed while 34-week moving average and 200-DMA are placed at 10800 and 10770 respectively.

Nifty, on Friday, touched a low of 10850, testing this support zone, and rebounded to end at 10930.

10866-10770 continues to be important support zone to eye. If this support zone gives way, 10640 followed by 10550, the 61.8% and 67% retracement levels of the 9951-11760 upmove, would be the next downside targets to eye.

On the way up, 11145, the top made during last week, is the immediate hurdle to eye above which 11250, the bottom made on 12th September, would be the next resistance.

Auto companies will report their September sales figures today.