19437 IS NEXT SUPPORT; 19750-19800 IS THE RESISTANCE ZONE

 

19437 IS NEXT SUPPORT; 19750-19800 IS THE RESISTANCE ZONE

 

WORLD MARKETS

 

On Friday, Dow and S & P 500 fell 0.5% and 0.3% respectively while Nasdaq inched up 0.1%. All three indices moved higher initially after personal consumption expenditure price index rose 0.1% month-on-month and 3.9% annually, as against the expected 0.2% and 3.9% readings respectively. But potential for a government shutdown weighed on the market later in the session. House GOP leaders failed to pass a short-term spending bill on Friday, bolstering fears that federal lawmakers wouldn’t reach an agreement on time.

 

For the week, Dow and S & P 500 fell 1.3% and 0.7% respectively while Nasdaq inched up 0.06%. For the month, U.S. indices fell 3.5%-5.8% with S & P 500 and Nasdaq wrapping up worst month of 2023.

 

Yesterday, Dow fell 0.2%, S & P 500 ended flat while Nasdaq gained 0.7%. The U.S. Congress passed a stopgap funding bill late on Saturday, which keeps the government open through mid-November, an extended period that lawmakers can use to finalize funding legislation.

 

Data from ISM showed U.S. manufacturing took a step further toward recovery in September as production picked up and employment rebounded. The survey also showed prices paid for inputs by factories falling considerably.

 

U.S. 10-year treasury yield rose 11 bps to 4.681%. Dollar index rose 0.8% to 107.03. Gold fell 1.1% to $1828 per ounce.

 

Brent futures for December delivery settled 1.6%, lower at $90.71 a barrel and WTI crude fell 2.2% to $88.82 per barrel.

 

In Europe, FTSE fell 1.3% while Dax and CAC slipped 0.9% each. The latest set of PMI surveys revealed an outgoing downturn in manufacturing output, as new orders fell by a near-record level.  Euro zone inflation fell to 4.3% for the month of September, its lowest level since October 2021.

 

In China, official data over the weekend showed PMI climbed to 50.2 in September from 49.7, beating expectations of 50.0.

 

AT HOME

 

Sensex and Nifty gained 0.5% and 0.6% respectively on Friday, recouping more than half of Thursday's steep cuts. Sensex settled at 65828, up 320 points while Nifty added 115 points to finish at 19638. Nifty mid-cap and small-cap indices surged 1.1% and 1% respectively. Except 0.3% lower IT index, all the NSE sectoral indices ended higher, with Pharma and Healthcare indices on the top, 2.7% and 2.6% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 1686 cr and 701 cr respectively but net bought stock futures worth Rs 1716 cr. DIIs were net buyers to the tune of Rs 2751 cr.

 

Rupee appreciated 15 paise to end at 83.04/$.

 

For the week, Sensex and Nifty fell 0.3% and 0.2% respectively, extending the losing streak to second straight week.

 

OUTLOOK

 

China’s markets are closed for the weeklong Golden Week holiday. Hang Seng and Nikkei are trading with deep cuts of 3% and 1.4% respectively today morning. GIFT Nifty is suggesting around 125 points lower start for our market.

 

In Friday's report we had said that 19437, the 78.6% retracement level of the 19223-20222 upmove, was the next downside level to eye while 19767, the top made Thursday, was the immediate hurdle.

 

Nifty rose to touch a high of 19726 but slipped from there to end at 19638. The benchmark is set to open below 19550 today.

 

19437, the 78.6% retracement level of the 19223-20222 upmove, continues to be next support. If this level breaks, Nifty might revisit 19223 bottom made on 31st August. On the way up, 19750-19800 is the immediate resistance zone.

 

For Banknifty, 44182, the low made last week, which coincided with a trendline adjoining bottoms made on 16th August and 1st September respectively, is the immediate support, upon breach of which, 43800-43600 would be next support area. On the way up, 44800-44900 is the immediate resistance zone, above which, 45250 and 45500, the 50% and 61.8% retracement levels of the recent 46310-44182 fall, would be next upside levels to eye.

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