NIFTY REBOUNDS FROM 11380 SUPPORT; 11695 CONTINUES TO BE HURDLE

NIFTY REBOUNDS FROM 11380 SUPPORT; 11695 CONTINUES TO BE HURDLE

WORLD MARKETS

US indices gained 0.4%-0.8% amid optimism around U.S.-China trade talks.

Treasury spokeswoman told Bloomberg on Saturday that the administration had no plans to impose restrictions at this time, before White House trade advisor Peter Navarro claimed in an interview with CNBC on Monday that the reports were “fake news.”

Earlier, data showed China’s official PMI increased from 49.5 in August to 49.8 in September, but remained below the 50-point mark that separates expansion from contraction.

Brent crude futures fell $1.16, or 1.9%, to $60.75 a barrel and WTI crude futures fell $1.84, or 3.3%, to settle at $54.07.

European markets, except 0.2% lower FTSE, gained 0.4%-0.7%. Data showed euro zone’s jobless rate fell to 7.4%, its lowest level in more than 11 years during August, raising hopes that the bloc can avoid a recession. A final estimate of U.K. second-quarter GDP showed the British economy contracting by 0.2%.

AT HOME

After falling nearly a percent in the first half, Sensex and Nifty recouped more than half of the losses later to end lower by 0.4% and 0.3% respectively, extending the losing streak to second straight day. Sensex lost 155 points to settle at 38667 while Nifty finished at 11474, down 38 points. BSE mid-cap and small-cap indices tumbled 1.1% and 1.2% respectively. BSE Bankex and Finance indices nosedived 2.6% and 2.4% respectively, becoming top losers among the sectoral indices while Telecom and Teck indices were the top gainers, up 3.9% and 2.4% respectively.

FIIs net sold stocks and stock futures worth Rs 469 cr and 182 cr respectively but net bought index futures worth Rs 701 cr. DIIs were net buyers to the tune of Rs 505 cr.

Rupee depreciated 31 paise to end at 70.87/$.

For the month, Sensex and Nifty gained 3.6% and 4.1% respectively, breaking 3-month losing streak.

India's core sector output contracted by 0.5% in August as aginst growth of 2.7% in the previous month.

Fiscal deficit in April-August 2019 period hit 79% of full year target.

OUTLOOK

Today morning, Hang Seng and Shanghai are shut while Nikkei is up 0.8%. SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had reiterated the view that 11695-11381 continues to be immediate range, a crossover of which, on either side, is required for a fresh move. We had also advised holding on to existing longs with the stop-loss of 11381.

Nifty, after touching a low of  11390, rebounded to close at 11474, holding on to 11381 support and vindicating our view.

11381, the lower end of the gap created by gap up opening on 23rd September, continues to be immediate support. If that gives way, 200-DMA, placed around 11250, would be the next support to eye.

11695, the top made last week, continues to be immediate support, a crossover of which is required for a fresh upmove.