NIFTY BREAKS 10700 SUPPORT; RUPEE AT 19-MONTH LOW

NIFTY BREAKS 10700 SUPPORT; RUPEE AT 19-MONTH LOW

WORLD MARKETS

After gaining nearly a percent in the initial trade, US indices saw a sustained downward move through the session to end with cuts of 0.7%-1.5%

The higher opening was attributed to news that instead of barring businesses with 25% or more Chinese ownership from purchasing U.S. tech-related groups, the government will rely on the U.S. Committee on Foreign Investment to deal with issues concerning foreign purchase of domestic technologies that are deemed sensitive. However, a drop in the financials and technology sectors washed all the gains.

US crude surged 3.2% to $72.76, its best close since November 2014 following a bigger-than-expected drop in U.S. crude stockpiles, a major Canadian supply outage, concerns about Libya's exports and stepped-up efforts by the Trump administration to disrupt Iran's petroleum exports. Brent rose $1.41 or 1.9% to $77.72 a barrel.

Dollar index rose more than half a percent to 95.29.

European markets gained 0.6%-1.1%.

AT HOME

Sensex and Nifty tumbled 0.8% and 0.9% respectively to close at the lowest level in nearly three weeks. Sensex settled at 35217, down 273 points while Nifty lost 98 points to finish at 10671. BSE mid-cap and small-cap indices nosedived 1.5% and 2% respectively to close at the lowest level since September 2017, marking a 9-month low. All the BSE sectoral indices ended in red with BSE Oil & Gas and Utilities indices leading the losses, down 3.8% and 2.7% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 67 cr, 10 cr and 194 cr respectively. DIIs were net buyers to the tune of Rs 84 cr.

Rupee fell 36 paise to end at 68.60/$, the lowest level in 19-months.

OUTLOOK

Today morning, Shanghai and Nikkei are down 0.7% and 0.4% respectively while Hang Seng is little changed. SGX Nifty is suggesting about 25 points lower start for our market.

After consolidating within 10700-10830 range for 9 sessions, Nifty broke this range on the way down by closing at 10671.

As mentioned in yesterday's report, 10550, the bottom made in early June, is the next downside target as well as support to eye. 10770 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts should be held on to.