NIFTY TESTS 10700 SUPPORT; 10800 IS THE IMMEDIATE HURDLE

NIFTY TESTS 10700 SUPPORT; 10800 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow tumbled 1.2% while S & P 500 and Nasdaq eased 0.4% and 0.3% respectively, with the Dow extending the losing streak to sixth straight day, after Trump threatened new tariffs against China. The Shanghai composite tumbled 3.82% and the Shenzhen composite fell 5.77%.

Trump, on Monday, said that he had asked the U.S. Trade Representative to identify $200 billion in Chinese goods that could be subject to additional tariffs. China said in response that it would take counter measures against the U.S. if it went ahead with issuing the list of extra tariffs.

U.S. Treasury prices rose with the yield on the 10-year U.S. Treasury note falling to 2.893%. Dollar index strengthened to 95. Commodities fell sharply with soybeans futures hitting their lowest prices in more than two years.

Main European markets fell 0.4%-1.2%.

AT HOME

Asian markets ended with deep cuts, spooked by US-China trade war concerns. Indian indices fell about eight tenth of a percent, extending the losing streak to second consecutive day. Sensex lost 261 points to settle at 35286 while Nifty finished at 10710, dwon 89 points. BSE mid-cap and small-cap indices tumbled 1% and 1.3% respectively. All the BSE sectoral indices ended in red with Metal and Energy indices leading the losses, down 1.7% each, followed by 1.6% lower Basic Material index.

FIIs net sold stocks, index futures and stock futures worth Rs 1325 cr, 710 cr and 282 cr respectively. DIIs were net buyers to the tune of Rs 654 cr.

Rupee depreciated 39 paise to end at 68.38/$, the weakest level since May 23.

The Bharatiya Janata Party (BJP) today pulled out of the alliance with the People’s Democratic Party (PDP) in Jammu and Kashmir (J&K).

The government has decided not to go ahead with Air India stake sale in an election year and will provide required funds for its operations.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that "On the way down, 10755, the low made last week, is the immediate support below which, 10700, where 34-DMA is placed, would be the important support to eye".

Nifty broke 10755 and fell all the way to 10701 and closed at 10710.

10700 continues to be important immediate support to eye below which 10650, where a trendline adjoining bottoms made in March and May is placed, would be the next support to eye.

10800 is the immediate hurdle, a crossover of which is required for a further upmove.