NIFTY RESISTED NEAR 10745 HURDLE; 10550 CONTINUES TO BE IMPORTANT SUPPORT

NIFTY RESISTED NEAR 10745 HURDLE; 10550 CONTINUES TO BE IMPORTANT SUPPORT

WORLD MARKETS

After opening with cuts of more than half a percent on persisting trade frictions, US equities recouped all the losses through the session on the back of gains in technology shares and ended with gains of 0.2%-0.8%

Media reports on Sunday suggested that the Trump administration is reportedly looking into drafting a bill that would allow the White House to unilaterally increase trade tariffs without congressional consent. Commerce Secretary Wilbur Ross yesterda said that President Trump will not change his mind even if the stock market falls sharply on trade worries.

Also, the European Union threatened to impose new retaliatory tariffs worth $300 billion if the U.S. moves forward with penalties on European cars.

US crude fell 21 cents to $73.94.

European markets fell 0.6%-1.2%. Euro area jobless rate fell to 8.4% in May. The IHS Markit manufacturing purchasing managers' index fell to a 18-month low in June on concerns over growing trade barriers.

AT HOME

After falling a percent, benchmark indices recouped half of the losses in late noon session to end lower by half a percent. Sensex settled at 35264, down 159 points while Nifty lost 57 points to finish at 10657. BSE mid-cap and small-cap indices lost 0.7% each. BSE Telecom index nosedived 2.6%, becoming top loser among the sectoral indices, followed by 1.8% lower Metal index. IT and Consumer Durable indices were the top gainers, up 0.9% and 0.5% respectively.

FIIs net sold stocks and index futures worth Rs 1205 cr and 350 cr respectively but net bought stock futures worth Rs 459 cr. DIIs were net buyers to the tune of Rs 367 cr.

Rupee depreciated 33 paise to end at 68.79/$.

Core sector growth dipped to a 10-month low of 3.6% in May from 4.6% in April.

The Nikkei India Manufacturing Purchasing Managers' Index rose to 53.1 in June from 51.2 in May, marking the best level in 7-months.

Hero Motocorp sold 7.04 lac units, a growth of 12.9%. Bajaj Auto's June sales surged 65% y-o-y to 2.45 lac units. Escort sold 9983 tractors, which was a growth of 73%. Ashok Leyland posted 28% growth at 15791 units. M & M's tractor sales were up 22% at 40529 units.

OUTLOOK

Today morning, Hang Seng is down more than 2%, Nikkei is marginally in the red and Shanghai is up 0.2%. SGX Nifty is suggesting a modestly higher start for our market.

In yesterday's report we had mentioned that 20-DMA, placed around 10745, is the immediate hurdle above which 10840 would be the next target to eye.

Nifty, after touching a high of 10736 in the initial trade, slipped to end at 10657 and is set to open little changed today.

10745 continues to be immediate hurdle, a crossover of which is required for a fresh upmove. 10550 continues to be important support on the way down.