11400 IS THE SUPPORT TO EYE; 11618 CONTINUES TO BE IMMEDIATE HURDLE

 

11400 IS THE SUPPORT TO EYE; 11618 CONTINUES TO BE IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices fell 0.9%-1.1% on Friday, with S & P 500 and Nasdaq extending the losing streak to third straight day, as profit booking continued in high-flying tech stocks. Tensions between China and the U.S. also dampened market sentiment.

 

Apple dropped more than 3% while Microsoft and Alphabet pulled back by 1.2% and 2.4%, respectively.

 

U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday.

 

Brent crude fell 55 cents to $42.75 a barrel while WTI settled 14 cents, or 0.3%, higher at $41.11 per barrel.

 

In Europe, FTSE and DAX slipped 0.7% each while CAC was down 1.2%. The World Health Organization warned of a “very serious situation” arising in Europe as cases rise significantly across the continent, forcing a reimplementation of lockdown measures in certain regions. Meanwhile, EU Chief Brexit negotiator Michel Barnier said that a deal with the U.K. is still possible. British retail sales rose by 0.8% in August, continuing a steady incline and slightly outpacing average economist expectations.

 

For the week, Dow ended flat while S & P 500 and Nasdaq fell 0.6% each. Main European markets fell 0.4%-1.1%. In Asia, Shanghai climbed 2.4% while other markets ended flat to marginally lower. WTI crude rallied 7.4%, snapping 2-week losing streak.

 

AT HOME

 

After rising nearly half a percent, benchmark indices slipped in late noon trade to end modestly lower, extending the losing streak to second straight day. Sensex settled at 38845, down 134 points while Nifty fell 11 points to finish at 11505. BSE mid-cap index gained 0.3% while small-cap index fell 0.3%. BSE Healthcare and Telecom indices climbed 3.5% and 2.7% respectively, becoming top gainers among the sectoral indices while Bankex and Finance indices were the top losers, down 1.1% each.

 

FIIs net bought stocks and index futures worth Rs 205 cr and 1900 cr respectively but net sold stock futures worth Rs 1449 cr. DIIs were net sellers to the tune of Rs 101 cr.

 

Rupee appreciated 20 paise to end at 73.44/$.

 

Dr Reddy shares surged after it settled a patent litigation with Celgene, which will allow the company to sell generic version of a blood cancer drug in the US post-March 2022.

 

Cipla climbed after the rival Perrigo pharma voluntarily recalled a key asthama drug.

 

For the week, Sensex ended flat while Nifty rose 0.4%.

 

OUTLOOK

 

Today, markets in Japan are closed for a holiday. Hang Seng and Shanghai are down 0.5% and 0.1% respectively and SGX Nifty is suggesting around 40 points lower start for our market.

 

In Friday's report we had said that 11460, where 20-DMA was placed, continued to be immediate support and that 11618, the top made on Wednesday was the immediate hurdle.

 

Nifty, after touching a high of 11584 in the initial trade, plunged to 11446 before closing at 11505 and is set to open near 11450 today.

 

11400, the 50% retracement level of the recent 11185-11618 upmove, which also coincides with 34-DMA, is the next important support to eye.

 

On the way up 11618, the top made last week, continues to be immediate hurdle.