11075 ABOVE 10936; 10740 IS IMMEDIATE SUPPORT

11075 ABOVE 10936; 10740 IS IMMEDIATE SUPPORT

WORLD MARKETS

Dow fell 0.2% but S & P 500 and Nasdaq gained 0.3% each on Friday, reacting to disappointing consumer sentiment data and gauging the potential for additional fiscal stimulus in the U.S. and Europe while COVID-19 cases continue to climb.

U.S. consumer sentiment index fell to 73.2 in July from 78.1, compared with expectations for a reading of 78.6. U.S. housing starts came in at a 1.19 million seasonally adjusted annual rate in June, nearly meeting the consensus forecast.

The U.S. posted a record of more than 70,000 new coronavirus cases in a single day Friday, the highest reported by any country since the start of the outbreak.

The Federal Reserve on Friday announced it had expanded its Main Street Lending Program to include nonprofit organizations. European Union leaders on Friday kicked off a two-day summit aimed at reaching an agreement on a €750 billion recovery fund.

Netflix plunged 6.5% after second-quarter earnings missed expectations and company issued weak guidance for third-quarter subscriber growth.

Media reports suggested that the U.S. President Donald Trump’s administration is considering banning travel stateside by all members of the Chinese Communist Party and their families.

Brent futures fell 24 cents to $43.13 a barrel while WTI crude settled 16 cents lower at $40.59 per barrel.

In Europe, FTSE and DAX rose 0.6% and 0.4% respectively but CAC fell 0.3%.

For the week, Dow and S & P 500 rose 2.3% and 1.3% respectively while Nasdaq lost 1.1%. Main European markets gained 2%-3.2%. In Asia, Shanghai and Hang Seng slipped 5% and 2.5% respectively while Nikkei and Nifty gained 1.8% and 1.2% respectively.

AT HOME

It turned out to be the best day of the week as benchamark indices soared 1.5% each to close at the highest level since 6th March, marking a near  four and a half month high. Sensex settled at 37020, up 548 points while Nifty added 161 points to finish at 10901. BSE mid-cap and small-cap indices rose 1.6% and 1.1% respectively. Except 0.9% and 0.4% lower IT and Teck indices respectively, all the BSE sectroal indices ended in green with Power and Energy indices leading the tally, up 5% and 4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 697 cr, 652 cr and 294 cr respectively. DIIs were net sellers to the tune of Rs 209 cr.

Rupee appreciated 17 paise to end at 75.01/$.

HDFC Bank reported mixed set of earnings. Net NPA ratio improved a 14-quarter low of 0.33% from 0.36% q-o-q. 20% Loan growth stood at healthy 20% and moratorium, at 9%, was the lowest in the industry. Management commentary was also positive. On the flip side, there was 9% rise in Gross NPAs. Retail loan growth rose just 7.2% y-o-y and declined 3.9% q-o-q and was at lowest ever. Return on Asset, at 1.76%, was the lowest in 20-quarters.

For the week, Sensex and Nifty gained 1.2% each, extending the winning streak to fifth consecutive week.

OUTLOOK

Today morning, Shanghai is up 0.9% but Hang Seng and Nikkei are off 0.7% and 0.4% respectively. SGX Nifty is suggesting around 30 points lower start for our market.

In Friday's report we had said that 10827, the top made on Wednesday, was the immediate hurdle, upon crossover of which 10894, the top made Monday, would be bigger hurdle to eye.

Nifty, after crossing 10827 hurdle, went further to conquer 10894 hurdle and made a high of 10933 before closing at 10901.

10933, the top made Friday, also coincided with the 34-month moving average placed around 10936. Upon crossover of 10933, 11075, which is the target of the triangle breakout witnessed on Friday, would be the next level to eye.

10740 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.