STAY LONG WITH THE STOP-LOSS OF 17700

 

STAY LONG WITH THE STOP-LOSS OF 17700

 

WORLD MARKETS

 

Dow ended little changed while S & P 500 and Nasdaq fell 0.2% and 0.5% respectively after jobs report disappointed.

 

US economy added just 194,000 jobs in September, well below the estimate of 500,000. On the flip side, the unemployment rate fell to 4.8%, the same level seen in late 2016 and better than the expectation for 5.1%. Monthly wage gain of 0.6% pushed the year-over-year increase to 4.6%. Plus, August’s jobs report was revised up to 366,000 compared to the initial read of 235,000.

 

US 10-year treasury yield rose 6 bps to top the 1.60% level, hitting its highest level since June 4. Spot gold rose 1.2% to $1,777.00 per ounce. Dollar index eased 0.1% to 94.103.

 

In Europe, FTSE rose 0.25% while DAX and CAC fell 0.3% and 0.6% respectively. Germany’s trade balance for August came in at positive 13 billion euros, slightly below a forecast of 15.8 billion euros.

 

For the week, Dow rose 1.2% for its best week since June, the S&P 500 rose 0.8% for its best week since August. The Nasdaq rose just shy of 0.1% since Monday. Dollar index rose 0.6% for its best weekly performance in 5 weeks.

 

AT HOME

 

Benchmark indices rose six tenth of a percent, with Nifty hitting a record high on closing basis. Sensex settled at 60059, up 381 points while Nifty added 105 points to finish at 17895. Nifty mid-cap and small-cap indices rose 0.4% and 1.2% respectively to hit fresh record highs. BSE Energy and IT indices climbed 2.7% and 1.8% respectively, becoming top losers among the sectoral indices while Realty index tumbled 2.5%, becoming top loser, followed by 0.8% lower Power index.

 

FIIs net sold stocks and stock futures worth Rs 64 cr and 201 cr respectively but net bought index futures worth Rs 22 cr. DIIs were net sellers to the tune of Rs 168 cr.

 

Rupee depreciated 21 paise to end at 7499/$.

 

Monetary Policy Committee left key rate unchanged and also decided to continue with the accommodative stance. RBI maintained FY22 GDP growth estimate at 9.5% with estimates for Q2 and Q3 being raised from earlier estimates. FY22 inflation forecast was lowered to 5.3% from earlier estimate of 5.7%.

 

The 10-year bond yield rose 5 basis points to hit an eighteen-month high after the Reserve Bank of India suspended its government securities acquisition programme.

 

For the week, Sensex and Nifty gained 2.1% and 2.2% respectively.

 

TCS Q2 Dollar revenue growth at 2.9% and EBITDA margin at 25.6% missed estimate.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 1.6% and 1.8% respectively while Shanghai is up 0.2%. SGX Nifty is suggesting a marginally lower start for our market.

 

In Friday's report we had said that 17885, the top made Wednesday, followed by 17947, the top made the previous week, continued to be upside level to eye and that 17581-17557, the gap created by Monday's gap-up opening, continued to be the support zone.

 

Nifty crossed 17885 hurdle and surged all the way to 17942 before closing at 17895.

 

17947, the top made on 24th September, continues to be immediate hurdle, upon crossover of which, 18100 would be next upside levels to eye; A trendline adjoining recent bottoms on the hourly chart lands support around 17700.

 

For Banknifty, 38377, the top made on 27th September, is the immediate hurdle, upon crossover of which, 39000 would be upside levels to eye. 37300 is the immediate support on the hourly chart.