STAY SHORT WITH THE STOP-LOSS OF 17782

 

STAY SHORT WITH THE STOP-LOSS OF 17782

 

WORLD MARKETS

 

US indices tumbled 0.4%-1.6% as concerns over economic growth and a possible government shutdown saw Wall Street headed for a steep monthly drop.

 

The Senate and House both passed a short-term appropriations bill that would keep the government running through Dec. 3 and sent it to President Joe Biden to sign.

 

Fed Chair Powell warned again during a Congressional hearing yesterday that inflation pressures from the pandemic could last longer than previously expected, though he said he still believes they will be temporary. Treasury Secretary Yellen again called for Congress to raise the debt ceiling, saying the results would be “catastrophic” if legislators failed to Act.

 

U.S. initial jobless claims rose for a third straight week to 362,000 for the period ending Sept. 25, higher than the expected 335,000 figure. Meanwhile, U.S. economic growth accelerated to 6.7% in the second quarter.

 

US 10-year treasury yield slid 4 bps to 1.499%. Dollar index, after hitting a one-year high of 94.504, eased to end 0.1% lower at 94.287. Spot gold jumped 1.7% to $1,755.56 per ounce.

 

Brent crude rose 21 cents to $78.85 a barrel while U.S. oil rose 32 cents to $75.15 a barrel.

 

China’s official manufacturing PMI for September came in at 49.6, below expectations for a reading of 50.1.

 

European markets fell 0.3%-0.7%. The U.K. economy grew by 5.5% in the second quarter, outstripping a previous estimate of 4.8% GDP growth. French consumer spending rose by 1% in August from the previous month, after falling 2.4% in July and beating the forecast of a 0.1% rise. Eurozone unemployment dropped to 7.5% in August from 7.6% in July.

 

The S&P 500 finished the month down 4.8%, breaking a seven-month winning streak. The Dow and the Nasdaq fell 4.3% and 5.3%, respectively, suffering their worst months of the year.

 

AT HOME

 

Benchmark indices fell half a percent, extending the losing streak to third straight day. Sensex lost 287 points to settle at 59126 while Nifty finished at 17618, down 93 points. Nifty mid-cap and small-cap indices however gained 0.25% and 0.4% respectively.  BSE Realty and Consumer Durables indices rose 1.5% and 1% respectively, becoming the top gainers among the sectoral indices while Bankex and Metal indices were the top losers, down 1% and 0.9% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2226 cr, 2468 cr and 2283 cr respectively. DIIs were net buyers to the tune of Rs 97 cr.

 

Rupee depreciated 8 paise to end at 74.23/$.

 

India's core sector output rose 11.6% in August vs 9.9% in July. April-June current account surplus stood at 0.9% of GDP Vs 3.7% y-o-y.

 

OUTLOOK

 

Markets in Hong Kong are closed today for a holiday, while those in mainland China are closed from today till October 7 for the Golden Week holiday. Nikkei is down nearly 2% and SGX Nifty is suggesting around 175 points lower start for our market.

 

In yesterday's report we had said that 17800 continued to be the immediate hurdle on the hourly chart while 17576, the low made Tuesday, continued to be immediate support.

 

Nifty, after touching a high of 17742 in the initial trade, slipped to end at 17618 and is set to open below 17500 today.

 

17326, the low made last week, is the next downside level to eye.

 

17782, the top made Wednesday, is the immediate hurdle, with the stop-loss of which, trading shorts can be held on to.

 

36900, 36525 are the downside levels to eye for Banknifty; 37925-38050 is the immediate resistance zone.

 

September auto sales figures will be out today.