10782 BELOW 10901; 11181 CONTINUES TO BE IMMEDIATE HURDLE

10782 BELOW 10901; 11181 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS

US indices soared 1.4%-2% after the U.S. announced a delay in the implementation of tariffs on some Chinese goods.

The United States Trade Representative said certain products including clothing and cellphones are being removed from the tariff list based on “health, safety, national security and other factors” and will not face additional tariffs of 10%. Other tariffs will be delayed to Dec. 15 from Sep. 1 for certain articles, it said.

Meanwhile, the Labor Department’s consumer price index report showed inflation came in as expected last month.

Brent futures surge 4.5% to $61.20 a barrel, while WTI crude rose 4% to $57.10.

Earlier, the People’s Bank of China set the official midpoint reference rate for the yuan at 7.0326 per dollar, stronger than expected but above the psychological barrier of 7 per dollar for the fourth consecutive session.

European markets gained 0.3%-1.4%.

AT HOME

Sensex and Nifty nosedived 1.7% each, registering biggest fall since 8th July 2019. Sensex lost 623 points to settle at 36958 while Nifty finished at 10925, down 184 points.  BSE mid-cap and small-cap indices tumbled 2.2% and 1.4% respectively. Telecom and Auto indices slipped 4.3% and 3.9% respectively, becoming top losers among the sectoral indices while Energy index soared 6%, becoming top gainer, followed by 1% higher Oil & Gas index.

FIIs net sold stocks, index futures and stock futures worth Rs 638 cr, 153 cr and 970 cr respectively. DIIs were net buyers to the tune of Rs 202 cr.

Rupee depreciated 60 paise to end at 71.40/$.

Retail inflation eased to 3.15% in July from 3.18% rate in June. Core CPI rose to 4.3% from 4.1%.

OUTLOOK

Today morning, Asian markets are trading with gains of 1%-1.6% and SGX Nifty is suggesting about 20 points higher start for our market.

In yesterday's report we had said that 11181, the top made on Friday, which roughly coincided with 200-DMA and trendline adjoining recent tops on the daily chart, is the immediate hurdle to eye while 10940 is the immediate support.

Nifty plunged all the way to 10901 before closing at 10925 and is set to open higher today.

10901, the low made yesterday, coincides with a trendline adjoining recent bottoms on the hourly chart. Also a breach of 10901 would confirm a "Sell" on the hourly chart and would pave the way for further correction. 10782, the low made last week, would be the next support if that happens.

11181, the top made on Friday, continues to be immediate hurdle.

Grasim will report its quarterly earnings today.