SEPTEMBER SET TO START WITH A GAP-DOWN

 

SEPTEMBER SET TO START WITH A GAP-DOWN

 

WORLD MARKETS

 

US indices tumbled 1% on Tuesday. Yesterday, US indices fell 0.6%-0.9%, extending the losing streak to fourth straight session.

US 10-year treasury yield rose 7 bps to 3.181%. Dollar index eased 0.1% to 108.68. Spot gold fell 0.7% to $1,712.56 an ounce.

 

China’s manufacturing PMI for August beat expectations slightly but contracted for the second consecutive month.

 

Oil prices extended fall on worries about the ailing state of the global economy, the prospect of central bank interest rate hikes, and increased restrictions to curb Covid-19 in China. Brent crude futures plunged 4.9% to $94.92 a barrel, following Tuesday’s 5% loss. WTI fell 3% to $89.50 after falling 5% in previous session.

 

European markets fell 1%-1.4%. Flash figures put euro zone inflation at a new record high of 9.1% in August, driven by soaring energy prices.

 

For August month, US indices fell 4%-4.6%. Dollar index rose 2.7%, extending the up-streak to third consecutive month. Gold fell 3%, extending the losing streak to fifth straight month. Brent and WTI crude plunged 8.4% and 7% respectively, falling for the third straight month.

 

AT HOME

 

Sensex and Nifty soared 2.6% and 2.7% respectively, posting biggest gain since 20th May, 2022. Sensex settled at 59537, up 1564 points while Nifty added 446 points to finish at 17759. Nifty mid-cap and small-cap indices rose 2% and 1.3% respectively. All the BSE sectoral indices ended higher, with Realty index and Bankex on the top, up 3.5% and 3.3% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 4166 cr, 1782 cr and 1298 cr respectively. DIIs were net sellers to the tune of Rs 657 cr.

Rupee appreciated 51 paise to end at 79.45/$.

 

For the August month, Sensex and Nifty gained 3.4% and 3.5% respectively, extending the winning streak to second straight month and registering highest ever monthly close.

 

India's Q1FY23 GDP growth came in at 13.5%, lower than the expected 15-16% mark.

 

OUTLOOK

 

Today morning, Shanghai is up 0.3% but Hang Seng and Nikkei are down 0.8% and 1.7% respectively. SGX Nifty is trading around 17470, suggesting nearly 350 points lower start when compared to Tuesday's close of Nifty future.

 

In Tuesday's report we had said that 34-DMA, placed around 17100, continued to be downside support while 17575 was the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

Nifty soared to touch a high of 17777 before closing at 17750. The benchmark however is set to open below 17500 today.

 

17400-17380, the gap created by Tuesday's gap-up opening, would be the immediate support area to eye after today's big gap-down opening. If 17380 gives way, 17166, the low made Monday, would be the next downside level to eye; 17777, the top made Tuesday, would be immediate hurdle.

 

For Banknifty, 38472-38400, the gap created by Tuesday's gap-up opening, would be the support area to eye; 39606, the top made Tuesday, would be immediate hurdle above which, 39759, the top made on 19th August, would be the next upside level to eye.

 

Auto sales figures for August will start coming today.