NIFTY PLUNGES TOWARDS 34-DMA TARGET; TRAIL STOP-LOSS TO 10000

NIFTY PLUNGES TOWARDS 34-DMA TARGET; TRAIL STOP-LOSS TO 10000

WORLD MARKETS                             

US indices ended with cuts of upto 0.3% and safe haven assets jumped on US-North Korea tensions.

Trump, on Tuesday, warned North Korea about facing "fire and fury" if North Korea delivers more threats against the U.S. North Korea responded by saying it was "carefully examining" the idea of a missile strike on Guam, a U.S. Pacific territory.

Bond prices climbed with 10-year U.S. note yield falling 7 bps to hit its lowest level since June 28 and gold surging more than 1%. Swiss franc rose almost 1% against the U.S. dollar. The yield on the German government bond dropped to a six-week low.

Disney plunged 4% after quarterly sales missed expectations.

In economic news, productivity in the second quarter rose 0.9%, more than the expected gain of 0.7%. Mortgage applications rose by 3% last week, boosted by a drop in rates. Wholesale trade data showed inventories posted their biggest gain in six months.

Brent crude gained 1.1% to $52.70 a barrel and U.S. crude rose 0.8% to at $49.56.

European markets fell 0.6%-1.4%.

AT HOME

Benchmark indices tumbled seven tenth of a percent, extending the losing streak to third straight day and closing at a three-week low. Sensex slipped 216 points to close at 31798 and Nifty finished at 9908, down 70 points. BSE mid-cap and small-cap indices plunged 1.7% and 1.9% respectively. All the BSE sectoral indices ended in red with Healthcare and Industrial indices leading the tally, down 3.7% and 2.1% respectively.

FIIs net sold stocks worth Rs 841 cr but net bought index futures and stock futures worth Rs 420 cr and 151 cr respectively. DIIs were net buyers to the tune of Rs 553 cr.

Rupee depreciated 20 paise to end at 63.83/$.

Tata Motor's June quarter missed expectations. Consolidated profit, aided by one-time gain of Rs 3609 cr, rose 42% y-o-y to Rs 3200 cr. Consolidated revenue fell 9.6% to Rs 58651 cr. Operating profit was down 26.5% at Rs 5597 cr and margin contracted by 210 bps to 9.6%. JLR margin crashed to 7.9% from 12.6%.

Eicher Motors reported 29% jump in revenue at Rs 2254 cr. EBIDTA was up 32% at Rs 620 cr and PAT soared 22% to Rs 459 cr. Margin improved to 53.2% from 53%.

Aurobindo Pharma reported 2% dip in revenue at Rs 3679 cr. Margin eased to 22.4% from 23.6%. PAT fell 11% to Rs 518 cr.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 10 points lower start for our market.

Readers would recall that we had initiated a short-term bearish stance after immediate support of 10000 was taken out. In yesterday's report we had mentioned that 9944, the bottom made towards July end, is the immediate support below which 34-DMA, placed around 9830, would be the next target as well as the important support to eye.

Nifty broke 9944 support and plunged all the way to 9893, moving towards target mentioned above.

34-DMA, placed around 9840, continues to be important support to eye around which some profit in short positions should be booked.

Immediate resistance on the hourly chart is placed at 10000, which should serve as the stop-loss for short positions.

GAIL, BHEL, Bharat Forge and Motherson Sumi will report their quarterly earnings today.