NIFTY REBOUNDS FROM 20-WEEK MOVING AVERAGE

 

NIFTY REBOUNDS FROM 20-WEEK MOVING AVERAGE

 

WORLD MARKETS

 

US indices surged nearly 2%, with Dow and S&P 500 snapping a six-day losing streak, after the Bank of England said it would buy bonds to stabilize its financial markets, a stunning reversal in the monetary tightening policies implemented by most central banks to combat inflation.

 

US 10-year treasury yield plunged 22 bps to 3.73%. Dollar index tumbled 1.3% to 112.71. Pound rose 1.45% against the dollar. Spot gold climbed 2% to $1,661 per ounce.

 

Oil rose following unexpected drawdown in U.S. crude and fuel stocks. Brent crude futures rose 3.5% to $89.32 and WTI crude futures settled 4.65% higher at $82.15 per barrel.

 

European markets gained 0.2%-0.4%.

 

AT HOME

 

Benchmark indices fell 0.9% each, extending the losing streak to sixth straight session. Sensex settled at 56598, down 509 points while Nifty lost 148 points to finish at 16858. Nifty mid-cap and small-cap indices fell 0.3% and 0.5% respectively. BSE Metal index tumbled 2.3%, becoming top loser among the sectoral indices, followed by 1.5% lower Bankex. Healthcare and IT indices were the top gainers, up 0.5% and 0.3% respectively.

 

FIIs net sold stocks and stock futures worth Rs 2772 cr and 401 cr respectively but net bought index futures worth Rs 104 cr. DIIs were net buyers to the tune of Rs 2544 cr.

 

Rupee depreciated 36 paise to end at 81.94/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.8%-2% and SGX Nifty is suggesting nearly 200 points gap-up start for our market.

 

In yesterday's report we had said that 16880-16800 continued to be next support area and had advised trailing stop-loss in short positions to 17370.

 

Nifty plunged all the way to 16820 before closing at 16858. The benchmark is set to open above 17000 today.

 

16800, where 20-week moving avearge is placed, continues to be important immediate support. 17200-17290, the gap created by Monday's gap-down opening, is the resistance zone.

 

For Banknifty, 37250, the low made in August, is the downside level to eye; 39100 is immediate hurdle.