19437 IS THE NEXT SUPPORT; 19767 IMMEDIATE HURDLE

 

19437 IS THE NEXT SUPPORT; 19767 IMMEDIATE HURDLE

 

WORLD MARKETS

 

U.S. indices gained 0.4%-0.8% as Treasury yields eased from multiyear highs.

 

Data showed the U.S. economy maintained fairly strong growth in the second quarter at an unrevised 2.1% annualized rate. Jobless claims totaled 204,000 for the week ending Sept. 23, lower than the expected 215,000 figure. Contracts to buy U.S. existing homes fell the most in nearly a year as high mortgage rates erode affordability.

 

Meanwhile negotiations on a U.S. spending bill continued before Oct. 1 deadline.

 

U.S. 10-year treasury yield, after hitting a high of 4.688%, reversed and closed 4 bps lower at 4.577%. Dollar index fell half a percent to 106.13. Gold fell 0.6% to $1865 per ounce.

 

WTI crude futures fell 2.1% to $91.72 per barrel and Brent fell 1.4% at $95.18.

 

European markets rose 0.1%-0.7%. Preliminary inflation figures from Germany showed inflation slowing more than expected.

 

Japan's Finance Minister said Japan would not rule out any options if there was any excessive volatility in currency moves, warning against speculative yen moves amid the currency’s fall.

 

AT HOME

 

Benchmark indices nosedived nearly a percent and closed at the lowest level after 1st September. Sensex settled at 65508, down 610 points while Nifty lost 193 points to finish at 19523. Nifty mid-cap and small-cap indices tumbled 1.3% and 0.4% respectively. All the NSE sectoral indices ended lower, with IT and FMCG indices being the top losers, down 2.2% and 1.9% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 3364 cr, 3893 cr and 7741 cr respectively. DIIs were net buyers to the tune of Rs 2711 cr.

 

Rupee appreciated 3 paise to end at 83.18/$.

 

For the September derivative series, Nifty gained 1.4%.

 

India's Current Account Deficit for Q1 came in at $9.2 bn (1.1% of GDP), much higher than the $1.3 bn in Q4 (0.1% of GDP) and higher than the expectation as well.

 

OUTLOOK

 

CPI in Japan rose 2.8% y-o-y in September, softening from the 2.9% gain in August. The core inflation rate came in at 2.5%, lower than the 2.6% expected.

 

Today morning, Hang Seng is up 2%, Nikkei is down 0.3% while Shanghai is shut. GIFT Nifty is suggesting a flattish start for our market.

 

In yesterday's report we had said that 19750-19800 was the immediate resistance zone while 19554, the low made Wednesday, was immediate support.

 

Nifty, after touching a high of 19766, reversed and plunged all the way to 19492 before closing at 19523.

 

19437, the 78.6% retracement level of the 19223-20222 upmove, is the next downside level to eye; 19767, the top made yesterday, is the immediate hurdle.

 

For Banknifty, 44182, the low made Wednesday, continues to be immediate support to eye, below which 43800-43600 would be next support area; 44800 is the immediate hurdle on the hourly chart, above which, 45000 and 45250, the 38.2% and 50% retracement levels of the recent fall, would be next upside levels to eye.

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