10850 IS THE NEXT TARGET/HURDLE; TRAIL STOP-LOSS TO 10625

10850 IS THE NEXT TARGET/HURDLE; TRAIL STOP-LOSS TO 10625

WORLD MARKETS

Dow and S & P 500 plunged 1.6% each while Nasdaq nosedived 3% amidst sell-off in technology shares and worries over US-China trade war.

Apple led tech shares lower after media report suggested that the company has cut production orders for the new iPhones unveiled earlier this year. Facebook dropped 5.7% on concerns over fallout from its handling of the 2016 election and foreign influence on its platform. News report that Chinese authorities have alleged "massive evidence" of antitrust violations by Samsung, SK Hynix and Micron Technology also weighed on the sentiment.

US Vice President Mike Pence said in a speech Sunday that there would be no end to U.S. tariffs on $250 billion worth of Chinese goods unless Beijing changed its ways.

WTI crude rose 30 cents to $56.76 a barrel while Brent rose 21 cents to $66.97.

European markets fell between 0.2%-0.9%.

AT HOME

Sensex and Nifty gained 0.9% and 0.8% respectively, extending the winning streak to third consecutive day and  closing at fresh 1-1/2 month high. Sensex added 317 points to settle at 35774 while Nifty finished at 10763, up 81 points. BSE mid-cap and small-cap indices gained 0.4% each. Except a 0.2% lower Oil & Gas index, all the BSE sectoral indices ended in green with Realty and FMCG indices leading the gains, up 1.4% and 1.3% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1103 cr, 861 cr and 34 cr respectively. DIIs were net sellers to the tune of Rs 310 cr.

Rupee appreciated 28 paise to end at 71.64/$. sep 4

RBI's board yesterday discussed the Basel regulatory capital framework, a restructuring scheme for stressed MSMEs, bank health under Prompt Corrective Action (PCA) framework and the Economic Capital Framework (ECF) of RBI.

The Board decided to constitute an expert committee to examine the ECF, the membership and terms of reference of which will be jointly determined by the government and the RBI. It also advised that the RBI should consider a scheme for the restructuring of stressed standard assets of MSME borrowers with aggregate credit facilities of up to Rs 25 crore, subject to conditions of ensuring financial stability. With regard to banks under PCA, it was decided the matter will be examined by the Board for Financial Supervision (BFS) of RBI.

While deciding to retain the capital to risk-weighted assets ratio (CRAR), also called the capital adequacy ratio (CAR), at 9%, the RBI board agreed to extend the transition period for implementing the last tranche of 0.625% under the Capital Conservation Buffer (CCB), by one year, i.e., up to March 31, 2020.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.7%-1% and SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had said that "200-DMA, placed around 10760, continues to be immediate hurdle to eye upon sustained trading above which 34-week moving average, placed around 10850, would be the next important hurdle to eye".

Nifty rose 81 points to close at 10763 and is set to open below 10750 today.

Having crossed 200-DMA, 34-week moving average, placed around 10850, continues to be next important target as well as resistance to eye.

Immediate support on the hourly chart has moved up to 10625, with the stop-loss of which, trading longs should be held on to.