19160, 18934 ARE DOWNSIDE LEVELS TO EYE; 19550 IS TOUGH HURDLE

 

19160, 18934 ARE DOWNSIDE LEVELS TO EYE; 19550 IS TOUGH HURDLE

 

WORLD MARKETS

 

Dow inched up 0.1%, S & P 500 was flat while Nasdaq fell 0.2% on Friday.

 

U.S. 10-year treasury yield fell 2 bps to 4.257%. Dollar index was flat at 103.43. Gold was little changed at $1889 per ounce.

 

WTI crude futures gained 1.1% to settle at $81.25 a barrel, and Brent crude futures rose 0.8% to settle at $84.80 a barrel.

 

In Europe, FTSE and DAX fell 0.6% each while CAC fell 0.4%.

 

For the week, U.S. indices fell 2.1%-2.6%, with the Dow posting its worst week since March while S & P 500 and Nasdaq fell for the third consecutive week. European markets fell 1.6%-3.5%. In Asia, Hang Seng nosedived 6%, while Nikkei and Shanghai tumbled 3.2% and 2.4% respectively. Indian benchmark indices outperformed with just 0.6% cut.

 

Dollar index rose 0.6% for it's fifth consecutive up-week. Gold fell 1.3% for its fourth consecutive negative week and hit its lowest level in 5-1/2 months. Oil prices dropped about 2%, snapping a 7-week winning streak.

 

AT HOME

 

Benchmark indices fell 0.3% each, extending the losing streak to second straight session and closing at the lowest level after 30th June. Sensex settled at 64948, down 202 points while Nifty lost 55 points to finish at 19310. Nifty mid-cap and small-cap indices fell 0.2% and 0.5% respectively.

 

Nifty IT index tumbled 1.5%, becoming top loser among the sectoral indices, followed by 0.7% lower Realty and Healthcare indices. Media index was the top gainer, up 0.6%, followed by 0.2% higher PSU Bank, FMCG and Metal indices.

 

FIIs net sold stocks and stock futures worth Rs 267 cr and 2125 cr respectively but net bought index futures worth Rs 1071 cr. DIIs were net buyers to the tune of Rs 339 cr.

 

Rupee appreciated 5 paise to end at 83.10/$.

 

For the week, Sensex and Nifty fell 0.6% each, extending the losing streak to fourth consecutive week.

 

OUTLOOK

 

China slashed its one-year loan prime rate by 10 bps to 3.45%, but kept its five-year rate unchanged at 4.2%.

 

Today morning, Nikkei is up 0.4% but Hang Seng and Shanghai are down 1.3% and 0.5% respectively. GIFT Nifty is suggesting a marginally lower start for our market.

 

In Friday's report we had said that 19160 and 18934 continued to be next downside levels to eye and had advised holding on to short positions with the stop-loss of 19550.

 

Nifty fell to 19253 before closing at 19310.

 

19160 followed by 18934, the 61.8% and 78.6% retracement levels of the 18646-19991 up move seen since 26th June, continue to be next downside levels to eye; On the way up, 20 as well as 34-DMAs are placed around 19550, making it a tough resistance to eye.

 

For Banknifty, 43345, the low made in June, is the next support, upon breach of which, 34-week moving average, placed around 42800, would be next major support to eye. On the way up, 44500 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

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