EQUITIES, OIL, TREASURY YIELDS TUMBLE AFTER TRUMP IMPOSES ADDITIONAL TARIFFS ON CHINA

EQUITIES, OIL, TREASURY YIELDS TUMBLE AFTER TRUMP IMPOSES ADDITIONAL TARIFFS ON CHINA

WORLD MARKETS

US indices fell 0.8%-1% after President Donald Trump said the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.

Bonds and Gold surged while oil plunged on the news. The benchmark 10-year yield slid to 1.892%, hitting its lowest level since November 2016. Spot gold rose 1.9% to $1,440.02 per ounce.

Oil prices saw their largest plunge in 4 years, with U.S. crude futures dropping 7.9% to $53.95 per barrel. Brent crude also saw its worst day since February 2016, dropping more than 6% to $60.67 per barrel.

European markets, except a flat FTSE, gained 0.5%-0.9%. The Bank of England voted unanimously to hold interest rates steady at 0.75% and cut its growth forecast to 1.3% for 2019 and 2020, down from 1.5% and 1.6% respectively in the face of increased Brexit worries and a slowing global economy.

AT HOME

After plunging more than 2%, benchmark indices saw a steep recovery in last half an hour to end with cuts of 1.2% each. Sensex lost 462 points to settle at 37018, its worst close since 8th March while Nifty lost 105 points to finish at 10980, its weakest finish since 1st March. BSE mid-cap and small-cap indices fell 0.9% and 1.1% respectively. BSE Metal and Basic Material indices tumbled 3.4% and 2.5% respectively, becoming top losers among the sectoral indices while Energy and Consumer Durables indices were the top gainers, up 0.5% and 0.2% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1057 cr, 2049 cr and 371 cr respectively. DIIs were net buyers to the tune of Rs 561 cr.

Rupee depreciated 26 paise to end at 69.05/$.

India's July Nikkei Manufacturing PMI rose to 52.5 from 52.1 in June.

GST collection for July stood at 1.02 lk cr, lower then the required run rate of 1.14 lk cr.

Hero Motocorp July sales slipped 21.2% y-o-y to 5.35 lk units. Eicher Motor’s Royal Enfield sales dipped 22% to 54185 units. Maruti July sales plunged 33.5% y-o-y to 1.09 lk units. Bajaj Auto posted 5% dip in total sales at 3.81 lk units. M & M auto sales fell 15% to 40142 units while tractor sales fell 12% to 19992 units. Eicher Motor's commercial vehicle sales tumbled 32.1% to 4048 units. Ashok Leyland reported 28% fall at 10927 units. TVS Motor sales fell 13.1% to 2.79 lk units.

OUTLOOK

Today morning, Asian markets are trading with cuts of 1.6%-2.2% and SGX Nifty is suggesting about 50 points lower start for our market.

After Nifty achieved 11000 target on Wednesday, in yesterday's report we had said that if 11000 gives way, 10800 and 10700, the 61.8% and 67% retracement levels of the entire 10004-12103 upmove, would be next supports to eye.

Nifty broke 11000 support and plunged all the way to 10881 before closing at 10980 and is set to open below 10950 today.

10880, the low made yesterday, is the immediate support to eye, upon breach of which, 10800 and 10700, the 61.8% and 67% retracement levels of the entire 10004-12103 upmove, would be next supports to eye.

1145, the top made on Wednesday, would now act as immediate hurdle, with the stop-loss of which, trading shorts can be held on to.