EXIT TRADING LONGS BELOW 9998

EXIT TRADING LONGS BELOW 9998

WORLD MARKETS                             

US Dow ended marginally in the green while S & P 500 and Nasdaq fell 0.2% and 0.4% respectively

Media reports suggested that Robert Mueller, the special counsel overseeing the investigation into possible Trump campaign collusion with Russia, has impaneled a grand jury in Washington, which indicates the probe is intensifying.

U.S. jobless claims totaled 240,000 versus expectations of 242,000. IHS Markit Services PMI Index hit 54.7 in July, slightly higher than in June, but ISM nonmanufacturing index showed growth in the services sector slowed last month.

European markets, except a 0.2% lower DAX, gained 0.3%-1%. Sterling fell 0.6% against the dollar following news that the Bank of England had voted 6-2 against a change in rates.

AT HOME

Sensex and Nifty tumbled about seven tenth of a percent, extending the losing streak to second day. Sensex lost 239 points to settle at 32238 while Nifty finished at 10014, down 68 points. BSE mid-cap and small-cap indices lost 0.5% and 1% respectively. BSE Metal index and Bankex nosedived 1.7% each, becoming top losers among the sectoral indices while Oil & Gas index was the top gainer, up 1.4%, followed by 1.1% higher Energy and Telecom indices.

FIIs net bought stocks and stock futures worth Rs 24 cr and 191 cr respectively but net sold index futures worth Rs 369 cr. DIIs were net sellers to the tune of Rs 389 cr.

Rupee appreciated 1 paise to end at 63.69/$.

IOC reported better-than-expected June quarter results on all parameters. Net profit fell 45% y-o-y to Rs. 4548 cr. Gross Refining Margin fell to $4.32/barrel from $9.98/barrel. Revenue rose to 1.29 lac crore, up from 1.08 lac crore.

India's Nikkei Service PMI for July plunged to 45.9, the lowest since September 2013, from June's eight month high of 53.1. Composite PMI slipped to 46 from 52.7.

Cognizant reported 8.9% growth in revenue at USD 3.67 bn, meeting it forcast of 3.63-3.68 bn. The company revised its revenue growth outlook for the full year to 9-10% (USD 14.70-14.84 billion) compared to a previous forecast of 8-10% growth.

OUTLOOK

Today morning, except a marginally higher Hang Seng, other Asian markets are trading with modest cuts and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had reiterated the view that 10000 is the immediate support, a breach of which will generate a sell on the hourly chart and would pave the way for further correction.

Nifty yesterday touched a low of 9998 before closing at 10014, holding the 10000 support by the skin of it's teeth.

A breach of 9998, the low made yesterday, would confirm a sell on the hourly chart and would pave the way for further correction. 20-DMA, placed around 9930, would be the next immediate target if that happens, below which 34-DMA, placed around 9800, would be the next important support to eye.

Traders are advised to exit long positions if 9998 is breached.

HPCL, M & M and Dabur will report their quarterly earnings today.

Key data to watch out today would be the US non-farm payroll figure, which is expected to show an addition of 185000 jobs in July.