10440 IS THE NEXT SUPPORT; TRAIL STOP-LOSS IN SHORTS TO 10700

10440 IS THE NEXT SUPPORT; TRAIL STOP-LOSS IN SHORTS TO 10700

WORLD MARKETS

US indices surged 0.5%-1.2% with the Dow leading the tally and closing above the 25,000 mark for the first time since mid-March on the back of easing trade tensions between US-China.

Over the weekend, US treasury Secretary Steven Mnuchin said the prospect of a trade war was "on hold" following an agreement to suspend tariff threats.

On Saturday, a joint statement said both the countries would continue talking about measures under which Beijing would import more energy and agricultural commodities from the U.S. in an effort to bridge the $335 billion annual U.S. goods and services trade deficit with China.

US crude climbed 1.4% to fresh 3.5 year high of $72.24 on continued geopolitical concerns. Brent was up 71 cents at 79.22/bbl.

In Europe, FTSE and CAC rose 1% and 0.4% respectively but Italy fell 1.5% on political worries.

AT HOME

Benchmark indices fell nearly seven tenth of a percent, extending the losing streak to fifth straight day. Sensex lost 232 points to settle at 34616 while Nifty finished at 10516, down 80 points. BSE mid-cap and small-cap indices nosedived 1.6% and 2.2% respectively. BSE Realty and Healthcare indices tumbled 3.1% and 2.6% respectively, becoming top losers among the sectoral indices while IT, Oil & Gas and Teck indices were the sole gainers, up 0.1% each.

FIIs net sold stocks, index futures and stock futures worth Rs 496 cr, 673 cr and 520 cr respectively. DIIs were net buyers to the tune of Rs 1191 cr.

Rupee fell 12 paise to end at fresh 16-month low of 68.12/$.

OUTLOOK

Today morning, Hang Seng is shut, Nikkei is flat and Shanghai is down 0.2%. SGX Nifty is suggesting about 20 points lower start for our market.

In yesterday's report we had said that 10600-10555 is an important support area as 10600 is where immediate previous bottom on the daily chart is placed, 10570 is where 34-DMA is placed and 10555 is the 38.2% retracement level of the entire 9951-10929 upmove.

Nifty however plunged 80 points to end at 10516, breaking this support zone. 10440, the 50% retracement level of the 9951-10929 upmove, is the next support to eye.

Immediate resistance on the hourly chart has moved lower to 10700, a crossover of which is required for a fresh upmove.

SBI, Dr Reddy, Cipla, IOC and HPCL will report their quarterly earnings today.