11461 CONTINUES TO BE IMMEDIATE SUPPORT; 11650 IMMEDIATE HURDLE

11461 CONTINUES TO BE IMMEDIATE SUPPORT; 11650 IMMEDIATE HURDLE

WORLD MARKETS

US indices rose 0.3%-0.8% to hit record highs after U.S. Federal Reserve Chairman Jerome Powell signaled that the U.S. central bank could be cutting interest rates soon.

In testimony to the House Financial Services Committee, Powell said business investments across the U.S. have slowed “notably” recently as uncertainties over the economic outlook linger. “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened,” Powell said in prepared remarks. “Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”

The Fed also released its minutes from the June policy meeting on Wednesday, which reiterated the case for easier monetary policy has strengthened.

Following the comments, Dollar and short-term treasury yields slipped while gold climbed 1.1% to $1415 per ounce.

Brent crude surged $2.88 or 4.5% to $67.04 a barrel and US oil rose $2.60 or 4.5% to $60.43 after U.S. crude inventories fell 9.5 million barrels in the week to July 5, as against expected fall of 3.1 mn barrels, and as major producers evacuated rigs in the Gulf of Mexico ahead of an expected storm.

European markets, except 0.7% higher FTSE, fell 0.1%-0.5%, with DAX leading the losses. U.K. economy grew by 0.3% in May after contracting by 0.4% in April and expected rise of 0.1%, aided by a resurgence in car production after Brexit-related shutdowns.

AT HOME

Benchmark indices fell half a percent, with Nifty extending the losing streak to fourth straight day. Sesnex lost 173 points to settle at 38557 while Nifty finished at 11498, down 57 points. BSE mid-cap and small-cap indices fell 0.8% each. All the BSE sectoral indices ended in red with Capital Goods index leading the losses, down 1.6%, followed by 1.5% lower Realty and Industrials indices.

FIIs net sold stocks and stock futures worth Rs 605 cr and 220 cr respectively but net bought index futures worth Rs 141 cr. DIIs were net buyers to the tune of Rs 667 cr.

Rupee appreciated 2 paise to end at 68.56/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-1% and SGX Nifty is suggesting about 35 points higher start for our market.

In yesterday's report we had mentioned that 11625-11650, the erstwhile support zone, would now act as immediate hurdle while 11461, the low made Tuesday, is the immediate support to eye.

Nifty, after touching a high of 11593 in the initial trade, slipped to touch a low of 11475 before closing at 11498 and is set to open higher today.

11625-11650 continues to be immediate resistance zone.

11461, the low made Tuesday, continues to be immediate support, upon breach of which, 11426, the lower end of the gap created by big gap-up opening after the exit polls, would be the next support to eye. If 11426 also gives way, 11360, where upward sloping trendline adjoining bottoms made in November 2018 and February 2019 is placed, would be the next important support.