US EQUITIES PLUNGE ON GLOBAL GROWTH CONCERNS; NIFTY GENERATES SELL ON HOURLY CHART

US EQUITIES PLUNGE ON GLOBAL GROWTH CONCERNS; NIFTY GENERATES SELL ON HOURLY CHART

WORLD MARKETS                             

US indices plunged in the vicinity of a percent on Friday as signs of slower global growth weighed on sentiment.

The U.S. flash manufacturing PMI for July edged up to 53.8, from a 20-month low hit in June. New home sales showed a decline of 6.8 percent to a seven-month low in June.

Copper and the Thomson Reuters Core Commodity CRB index fell to 6-year lows. In China, the Caixin Markit flash general manufacturing PMI for July came in at 48.2, a 15-month low. The July euro zone flash PMI was 52.2, a two-month low. Gold futures ended down $8.60 at $1,085.50 an ounce, posting five consecutive weeks of losses for the first time since October. Nymex oil fell 31 cents to $48.14 a barrel, the lowest level since March 31.

Chevron and Exxon Mobil hit multi-year lows with the continued decline in oil. DuPont closed 2.6% lower as materials had their worst week since December.

Earlier Shanghai Composite end lower by 1.3%, breaking a six-session winning streak.

European markets fell 0.5%-1.4%.

For the week, US indices tumbled 2.2%-2.9% with the

Dow posting its worst week since January while S&P 500 and Nasdaq posted their worst since March.  European markets fell 1%-3% with FTSE and DAX leading the tally.

AT HOME

After trading in a narrow range in the first half, benchmark Sensex and Nifty tumbled in the second half to end lower by 0.9% and 0.8% respectively on Friday, extending the losing streak to second consecutive day. Sensex settled at 28112, down 259 points while Nifty lost 68 points to finish at 8522.  BSE mid-cap and small-cap indices lost 0.6% each. Except a 0.1% each rise in BSE FMCG and Consumer Durable indices respectively, all the sectoral indices ended in red with Capital Goods and Realty indices leading the tally, down 1.6% and 1.3% respectively.

FIIs net bought stocks worth Rs 7 cr but net sold index futures and stock futures worth Rs 36 cr and 322 cr respectively. DIIs were net buyers to the tune of Rs 196 cr.

Rupee plunged 27 paise to end at 64.03/$.

For the week, Sensex and Nifty lost 1.2% and 1% respectively.

Axis Bank reported better-than-estimated 18.7% rise in April-June quarter net profit at Rs 1978 cr. NII surged 22.5% to Rs 4057 cr. Gross NPA ratio rose to 1.38% from 1.34% while Net NPAs rose to 0.48% from 0.44%.

Reliance Industries’ first quarter standalone net profit rose by 1.2% q-o-q to Rs 6318 cr. Total income rose 17.4% to Rs 65817 cr. Gross Refining Margin at USD 10.4 a barrel was the highest in 6 years. Operating margin stood at 14.1% against 15.4%.

A Supreme Court-appointed special investigation team (SIT) on unaccounted money has come down heavily on the creation of such funds through stock exchanges and participatory notes (P-notes). In a report, the SIT said the SEBI should have an effective monitoring mechanism to study unusual rises in stock prices and the use of stock exchanges to evade taxes through long-term capital gains. Sebi has also been asked to put in place a mechanism to monitor the beneficial owners of P-notes.

A panel headed by law commission chairman AP Shah to examine the vexed issue of minimum alternate tax (MAT) on foreign portfolio investors submitted its report to the government on Friday. Revenue Secretary Shaktikanta Das said the report would not be made public for now.

OUTLOOK

Today morning Asian markets are trading with cuts of 0.5%-1% and SGX Nifty is suggesting about 35 points lower opening for our market.

For whole of last week, we had been mentioning that 8670, the 61.8% retracement level of the 9119-7940 fall, is an important hurdle, a crossover of which is required for the further upmove. And therefore we had advised booking profits in trading long closer to 8670 and wait for the crossover of same for initiating fresh longs.

The benchmark went closer to 8670 hurdle couple of times but could not cross it and ended the week at 8521. Moreover, the benchmark generated a sell on the hourly chart on Friday. Immediate support on the way down is placed around 8470, where a trendline adjoining recent bottoms on the daily chart is placed.  Below that 8415, the 34-DMA would be the next support to eye.

Traders are advised to hold on to trading shorts with the stop loss of 8590, which is the immediate hurdle on the hourly chart.

Tech Mahindra and Ambuja Cements will report their quarterly earnings today.