NIFTY NEARS RESISTANCE ZONE; 10915 IS THE IMMEDIATE SUPPORT

NIFTY NEARS RESISTANCE ZONE; 10915 IS THE IMMEDIATE SUPPORT

WORLD MARKETS

Reversing opening gains, US indices ended with cuts of 0.3%-0.5% as yield curve inversion worsened and fears around the U.S.-China trade war weighed on the sentiment.

The spread between the 10-year Treasury yield and the 2-year rate fell to negative 5 basis points, its lowest level since 2007. The 3-month Treasury bill rate also traded higher than the 30-year bond yield.

Sentiment was also dampened after Hu Xijin, editor-in-chief at Chinese state-run newspaper The Global Times, said in a tweet that China is “not putting so much emphasis on trade talks,” adding that it’s “more and more difficult” for Washington to press Beijing to make concessions as the Chinese economy is becoming increasingly driven by domestic growth.

On Tuesday, China announced measures aimed at raising consumption, including a potential removal of restrictions on car purchases.

Back in the US, data showed U.S. consumer confidence inched down in August and growth in home prices hit its slowest pace in nearly seven years.

Brent crude rose 30 cents a barrel to $59.00 while WTI rose 73 cents to $54.37. Spot gold rose 1% to $1,540.57 per ounce while silver breached $18 for the first time in nearly two years.

In Europe FTSE ended marginally in the red while CAC and DAX rose 0.6% each. German GDP data showed Europe’s largest economy contracted on weaker exports in the second quarter.

AT HOME

Benchmark indices gained four tenth of a percent, extending the winning streak to third straight day. Sensex settled at 37641, up 147 points while Nifty added 47 points to finish at 11105. BSE mid-cap and small-cap indices gained 0.5% and 1.6% respectively. BSE Metal index climbed 2%, becoming top gainer among the sectoral indices, followed by 1.9% higher Auto and Industrials indices. Telecom index tumbled 2.3%, becoming top loser, followed by 1.7% lower Teck index.

FIIs net sold stocks worth Rs 924 cr but net bought index futures and stock futures worth Rs 655 cr and 1784 cr respectively. DIIs were net buyers to the tune of Rs 1163 cr.

Rupee appreciated 54 paise to end at 71.48/$.

OUTLOOK

Today morning, Shanghai is flat while Nikkei and Hang Seng are up 0.1% and 0.4% respectively. SGX Nifty is suggesting about 20 points higher start for our market.

After Nifty crossed the immediate hurdle of 10975, we have been working with the target of around 11200, where 200-DMA is placed.

Nifty yesterday touched a high of 11141 before closing at 11105 and is set to open higher today.

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. 11200 is also the 38.2% retracement level of the entire 12100-10640 fall. Once 11200 is taken out, 11370, the 50% retracement level of the 12100-10640 fall, would be the next upside target.

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