11146-11200 CONTINUES TO BE RESISTANCE ZONE; 10915 REMAINS NEAREST SUPPORT

11146-11200 CONTINUES TO BE RESISTANCE ZONE; 10915 REMAINS NEAREST SUPPORT

WORLD MARKETS

US indices gained 0.4%-1% as energy stocks got a lift from higher oil prices, but further inversion of a key part of the U.S. yield curve kept gains in check.

Brent futures rose 1.7% to $60.52 a barrel and WTI crude futures rose 1.5% to $55.75 a barrel after data showed a steep fall in U.S. crude stockpiles.

The closely watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points. The 30-year Treasury yield fell to a new record low of 1.907% before seeing a partial recovery.

Trade developments between US and China continues to be in focus. US is scheduled to impose the first stage of U.S. tariffs on $300 billion worth of Chinese goods on Sunday. China is set to respond with tariffs on U.S. products on the same day.

In Europe FTSE gained 0.4% but DAX and CAC fell 0.2% and 0.3% respectively. Sterling fell around 0.4% against the dollar on Wednesday after the queen approved British Prime Minister Boris Johnson’s plan to suspend parliament. The highly-controversial move will restrict parliamentary time before the Brexit deadline and increase the chances of the U.K. leaving the EU with no deal.

AT HOME

After falling nearly a percent, benchmark indices recouped half of the losses in last hour or so to end half a percent lower, breaking three-day winning streak. Sensex settled at 37451, down 189 points while Nifty lost 59 points to finish at 11046. BSE mid-cap and small-cap indices fell 0.9% and 0.6% respectively. BSE Metal index nosedived 3.4%, becoming top loser among the sectoral indices, followed by 1.9% lower Auto index. Realty and IT indices were the top gainers, up 1.9% and 1.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 935, 1420 cr and 287 cr respectively. DIIs were net buyers to the tune of Rs 359 cr.

Rupee depreciated 29 paise to end at 71.77/$.

Government yesterday allowed FDI in coal mining, contract manufacturing digital media while easing rules in single brand retail. Separately, finance ministry has notified rules allowing 100% FDI for insurance intermediaries.

OUTLOOK

Today morning, Nikkei and Hang Seng are off four tenth of a percent while Shanghai is little changed. SGX Nifty is suggesting about 30 points lower start for our market.

In yesterday's report we had said that "11140-11200 is the resistance zone for Nifty as 11146 and 11181 is where the tops made on 19th August and 9th August are placed while 11190 and 11200 is where 34 and 200 DMAs are placed".

Nifty, after touching a high of  11130 in the initial trade, slipped to touch a low of 10987 before closing at 11046 and is set to open lower today.

11140-11200 continues to be immediate resistance zone, a crossover of which is required for a fresh upmove. If that happens, 11370, the 50% retracement level of the 12100-10640 fall, would be the next upside target.

Meanwhile, 10915 continues to be immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.