10901 CONTINUES TO BE IMMEDIATE SUPPORT; 11181 CONTINUES TO BE IMMEDIATE HURDLE

10901 CONTINUES TO BE IMMEDIATE SUPPORT; 11181 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 rose 0.4% and 0.2% respectively while Nasdaq ended marginally in the red, helped by strong earnings from retail giant Walmart and strong retail sales figures.

Earlier, on Wednesday, indices plunged 3%, suffering their worst fall of 2019, amid a recession signal from the bond market. The yield on the benchmark 10-year Treasury note briefly broke below the 2-year rate, which. This inversion has been a reliable indicator of economic recessions. As of Thursday, the curve hovered around the inversion point. Meanwhile, the yield on the 30-year Treasury bond also fell to a new historic low and the 10-year Treasury yield hit its lowest in three years.

Retail sales rose solidly in July and beat expectations. Walmart reported better-than-expected earnings and raised its outlook for the full year. On the flip side, Cisco shares plunged 8.6% after it said future earnings would be lighter than expected because of a “significant impact” from the U.S.-China trade war.

Brent fell 3% to $57.67 a barrel while WTI was down 1.4% at $54.47.

European markets fell 0.3%-1.1% with Italy. On Wednesday, the U.K. 2-year/10-year curve inverted for the first time in over a decade while German and French bond yields hit record lows.

AT HOME

Benchmark indices climbed a percent in today's trade, recouping about two-third of the losses suffered yesterday. Sensex settled at 37311, up 353 units while Nifty added 103 points to settle at 11029. BSE mid-cap and small-cap indices gained 0.8% and 0.4% respectively. Except a 0.5% lower Healthcare index, all the BSE sectoral indices ended in green with Metal and Telecom indices leading the tally, up 2.7% and 2.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 1615 cr, 914 cr and 198 cr respectively. DIIs were net buyers to the tune of Rs 1620 cr.

Rupee appreciated 13 paise to end at 71.27/$.

India's July WPI inflation slowed to 1.08% from 2.02% month-on-month, marking the lowest reading in 25 months.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower while SGX Nifty is trading around 11028, suggesting about 90 points lower start when compared to Wednesday's close of Nifty futures.

In Wednesday's report we had said that a beach of 10901, the low made on Tuesday, would confirm a "Sell" on the hourly chart and 10782, the low made last week, would be the next support if that happens. We had also said that 11181, the top made on Friday, continues to be immediate hurdle.

Nifty, on Wednesday, added 103 points to close at 11029 but is set to open below 10950 today.

10901, the low made on Tuesday, continues to be immediate support, upon breach of which, 10782, the low made last week, would be the next support.

11181, the top made last week, continues to be immediate hurdle.