10670 CONTINUES TO BE IMMEDIATE SUPPORT; 10840 UPSIDE TARGET

10670 CONTINUES TO BE IMMEDIATE SUPPORT; 10840 UPSIDE TARGET

WORLD MARKETS

US indices gained 0.8%-1.1% ahead of activation of levies on $34 billion in Chinese-made goods by the US on Friday, with Beijing expected to respond with its own levies on U.S. goods.

The Federal Reserve's latest minutes showed officials were concerned about letting the U.S. economy running too hot, as that could cause problems leading to a "significant economic downturn."

Trump yesterday said an additional $16 billion of Chinese products will be subject to tariffs in two weeks, also adding that he was considering more duties on $500 billion in Chinese goods.

Data from ADP and Moody's Analytics showed jobs grew by 177,000 in June, missing expectations. Jobs growth for May was revised higher, however. Weekly jobless claims rose unexpectedly last week to 231,000.

European markets rose 0.4%-1.2%. Auto stocks rose amid news German carmakers were now prepared to support an elimination of EU tariffs on cars imported from the U.S.

Oil fell 1.6% to settle at $72.94 after surprise rise in US crude inventories.

AT HOME

Benchmark indices ended lower by a fifth of a percent after a rangebound but choppy session. Sensex lost 71 points to settle at 35574 while Nifty finished at 10750, down 20 points. BSE mid-cap and small-cap indices slipped 0.7% and 0.4% respectively. BSE Consumer Durable index tumbled 2.8%, becoming top loser among the sectoral indices, followed by 1.7% lower Realty index. FMCG index climbed 1%, becoming top gainers, followed by 0.2% higher Finance and Auto indices.

FIIs net sold stocks worth Rs 159 cr but net bought index futures and stock futures worth Rs 704 cr and 192 cr respectively. DIIs were net sellers to the tune of Rs 297 cr.

Rupee depreciated 21 paise to end at 68.95/$.

The Karnataka government today announced a partial farm loan waiver of Rs 34000 crore, which will benefit farmers whose borrowings are less than Rs 2 lakhs.

Titan shares tumble after the company said that a high base last year and a one-off impact of Rs 250-crore sales getting advanced in anticipation of higher goods and services tax rate are likely to impact the quarter ended June adversely.

OUTLOOK

U.S. tariffs on $34 billion worth of Chinese goods from 818 product categories are set to take effect at 12:01 p.m. HK/SIN. China has announced retaliatory duties on the same value of U.S. products, also expected to kick in on Friday.

Today morning, Nikkei and Hang Seng are up 0.9% and 0.3% respectively while Shanghai is marginally in the red. SGX Nifty is suggesting about 20 points lower start for our market.

After Nifty took out the 20-DMA hurdle, we had given next target of 10840, which is the top made on 22nd June. Yesterday, after touching a high of 10786 in the initial trade, Nifty slipped to end at 10750 and is set to open lower today.

10840 continues to be upside target to eye. 10670 continues to be immediate support, with the stop-loss of which, trading longs should be held on to.