10952, 10820 ARE SUPPORTS; 11240 IMMEDIATE HURDLE

10952, 10820 ARE SUPPORTS; 11240 IMMEDIATE HURDLE

WORLD MARKETS

US indices, after falling in negative territory in first half, rebounded later to end with gains of 0.4%-1.5% on Friday as the biggest tech companies  — Amazon, Apple and Facebook — soared after posting stellar quarterly results.

The earlier weakness was on the back of uncertainty over fresh coronavirus relief bill and weak economic data. White House Chief of staff Mark Meadows said Democratic leaders have rejected four offers regarding the coronavirus relief bill. Also, Dow-component Chevron fell 2.7% after reporting an $8.3 billion loss in the second quarter.

Meanwhile, University of Michigan’s consumer sentiment index came in at 72.5 for July, down from June’s 78.1 and below estimates of 72.7.

Brent crude rose 24 cents, or 0.7%, to $43.18 a barrel while West Texas Intermediate crude futures gained 35 cents, or 0.9%, to settle at $40.27 per barrel.

Gold futures spiked to an all-time high of $2,005.4 an ounce, crossing the $2,000 mark for the first time.

European markets fell 0.5%-1.5%. The euro zone economy contracted by 12.1% in the second quarter of 2020, compared to the first three months of the year and it's worst since records began in 1995. French economy contracted by 13.8% in the second quarter of the year, slightly better than estimates, but still the worst on record. Data on Thursday showed German economy contracted by 10.1% in the second quarter — the worst reading since records began in 1970.

For the month, US indices gained 2.3%-6.8%, posting their fourth straight positive month.

AT HOME

Benchmark indices ended lower by three tenth of a percent, extending the losing streak to third consecutive day and closing at the lowest level since 20th July. Sensex settled at 37606, down 129 points while Nifty lost 28 points to finish at 11073. BSE mid-cap and small-cap indices however gained 0.4% and 0.8% respectively. BSE Healthcare index climbed 3.4%, becoming top gainer among the sectoral indices, followed by 1.3% higher Realty index. Energy and Oil & Gas indices were the top losers, down 1.6% and 0.8% respectively.

FIIs net sold stocks and stock futures worth Rs 959 cr and 629 cr respectively but net bought index futures worth Rs 30 cr. DIIS were net buyers to the tune of Rs 443 cr.

Rupee appreciated 3 paise to end at 74.81/$.

For the week, Sensex and Nifty fell 1.4% and 1.1% respectively, breaking 6-week winning streak.

OUTLOOK

Tensions between Washington and Beijing will continue to be in focus. On Friday, Trump told reporters he will act soon to ban Chinese-owned video app TikTok from the U.S. On Sunday, U.S. Secretary of State Mike Pompeo said that U.S. President Donald Trump is set to announce “in the coming days” new actions related to Chinese software companies viewed by his administration as a national security threat.

Today morning, Nikkei and Shaghai are up 1.9% and 0.7% respectively while Hang Seng is down 1.4%. SGX Nifty is suggesting around 50 points lower start for our market.

In Friday's report we had said that 11084, the low made Thursday, which also coincided with the 33% retracement level of the recent 10562-11341 upmove was the immediate support, upon breach of which, 10952 and 10820, the 50% and 67% retracement levels of the 10562-11341 upmove, would be next downside targets.

Nifty broke 11084 support and touched a low of 11026 before closing at 11073 and is set to open near 11000 today.

10952, the 50% retracement level of the 10562-11341 upmove, continues to be next downside support. If 10952 gives way, 10820, the 67% retracement level of the 10562-11341 upmove, would be next downside target.

11240, which is the 67% retracement level of recent 11341-11026 fall, is the immediate resistance, upon crossover of which, 11341, the top made last week, would be bigger hurdle to eye.