17196-17291 IS THE RESISTANCE ZONE; 16747 IMPORTANT SUPPORT

 

17196-17291 IS THE RESISTANCE ZONE; 16747 IMPORTANT SUPPORT

 

WORLD MARKETS

 

Dow tumbled 1.7% while S & P 500 and Nasdaq fell 1.5% each on Friday on hot inflation data. Dow closed below 29,000 for the first time since November 2020.

 

US personal consumption expenditures price index (PCE), an inflation report closely watched by the Federal Reserve, which the Fed targets at 2%, rose 6.2% y-o-y in August.

 

On Thursday, San Francisco Fed President Mary Daly said she would be comfortable with interest rates rising as high as 5% in 2023, while Cleveland Fed President Loretta Mester said she sees no reason to slow rate hikes.

 

US 10-year treasury yield rose 4 bps to 3.83%. Dollar index rose 0.4% to 112.17. Gold ended flat at $1661 per ounce.

 

Brent crude December future fell 27 cents to $86.91 and WTI futures declined 51 cents to $80.72 per barrel.

 

European markets gained 0.2%-1.5%. Euro zone inflation zoomed past forecasts to hit 10.0% in September.

 

For the week, S & P 500 and Dow tumbled 2.9% each while Nasdaq fell 2.7%. European markets dipped 0.4%-1.8%. Asian markets fell between 1.2%-4.5%. For the month, US indices plunged 8.8%-10.5%, with the S & P 500 having its worst month since March 2020.

 

AT HOME

 

After starting in red, Sensex and Nifty saw a sustained northward climb through the session to end higher by 1.8% and 1.6% respectively, snapping 7-session losing streak. Sensex settled at 57426, up 1016 points while Nifty added 276 points to finish at 17094. Nifty mid-cap and small-cap indices added 1.6% each. Except a marginally lower Oil & Gas index, all the BSE sectoral indices ended in green, with Telecommunication and Metal indices being the top gainers, up 3.5% and 2.7% respectively.

 FIIs net sold stocks worth Rs 1565 cr but net bought index futures and stock futures worth Rs 756 cr and 1555 cr respectively. DIIs were net buyers to the tune of Rs 3245 cr.

Rupee appreciated 52 paise to end at 81.34/$.

 

For the week, Sensex and Nifty fell 1.2% and 1.3% respectively, extending the losing streak to third consecutive week.

 

RBI's Monetary Policy Committee voted to hike repo rate by 50 bps to 5.90% and maintained the policy stance at "withdrawal of accommodation". RBI cut FY23 GDP growth forecast to 7% from 7.2% but retained inflation forecast at 6.7%.

 

OUTLOOK

 

Mainland Chinese markets will remain closed through October 7th for Golden week holidays. Nikkei is up 0.6% while Hang Seng is down 0.1%. SGX Nifty is suggesting around 140 points lower start for our market.

 

In Friday's report we had said that 16788, the low made Thursday, which coincided with 20-week moving average, continued to be immediate support while 17150 was the immediate hurdle on the hourly chart.

 

Nifty, after touching a low of 16747, rebounded to end at 17094. The benchmark is set to open below 17000 today.

 

16747, the low made during the week, roughly coincided with 20-week moving average and hence is the important immediate support to eye; On the way up, 17196-17291, the gap created by last week’s gap-down opening, is the immediate resistance zone.

 

For Banknifty, 39229-39412, the gap created by last week’s gap-down opening, is the next upside level to eye; On the way down, 38100 is the immediate support, below which, 37386, the low made during the week, would be bigger level to eye.