11603-11620 IS THE IMMEDIATE RESISTANCE ZONE

11603-11620 IS THE IMMEDIATE RESISTANCE ZONE

WORLD MARKETS

US indices fell 0.2%-0.3% on Friday, with Nasdaq down for the fourth straight day.

Trump said tariffs on $200 billion of Chinese goods could "take place very soon." He also said the U.S. was ready to impose tariffs on an additional $267 billion worth of Chinese goods.

Wall Street Journal, citing U.S. officials, said that the possibility of the U.S. and China reaching a trade deal are fading. Bloomberg said that the U.S. and Canada will likely end the week with no trade deal in place.

Trump also said the U.S. would be starting trade negotiations with Japan, noting: "If we don't make a deal with Japan, Japan knows it's a big deal."

The U.S. economy added 201,000 jobs in August, more than the expected increase of 191,000. Average hourly earnings rose 2.9%, marking the largest jump since 2009. Treasury yields jumped to their highs of the session following the jobs report release, while the dollar also rose.

European markets ended mixed with FTSE and Italy down 0.6% and 0.4% respectively while DAX and CAC gained 0.04% and 0.2% respectively.  Eurozone GDP grew at 1.5% in second quarter, which was slightly below the 1.6% registered in the first-quarter of the year.

For the week, Dow fell 0.2%, S & P 500 lost 1% while Nasdaq plunged 2.6%. In Asia, Nikkei, Hang Seng and Shanghai fell 2.4%, 3.3% and 0.8% respectively. WTI fell more than 3.5% and Brent was down 1.6%.

AT HOME

After a modestly lower start, benchmark indices saw a sustained northward move through the session to end higher by four tenth of a percent, extending the winning streak to second consecutive day. Sensex added 147 points to settle at 38389 while Nifty finished at 11589, up 52 points. BSE mid-cap index soared 1.2% while small-cap index gained 0.6%. BSE Telecom and Auto indices soared 3.4% and 2.1% respectively, becoming top gainers among the sectoral indices while Power, Bankex and Finance indices fell 0.1%, 0.04% and 0.02% respectively.

FIIs net bought stocks and stock futures worth Rs 38 cr and 213 cr respectively but net sold index futures worth Rs 362 cr. DIIs were net buyers to the tune of Rs 942 cr.

Rupee appreciated 25 paise to end at 71.73/$.

For the week, Sensex and Nifty lost 0.7% and 0.8% respectively, breaking six-week winning streak.

OUTLOOK

Today morning, Nikkei is flat while Hang Seng and Shanghai are off 1.2% and 0.5% respectively. SGX Nifty is suggesting about 40 points lower start for our market.

After Nifty bounced back from the 34-DMA support placed at 11394, we had said that the immediate hurdle on the hourly chart is placed around 11600, a crossover of which is required for a fresh upmove.

Nifty, after touching a high of 11603 on Friday, closed at 11589 and is set to open around 11550 today.

11603 is where the top made on Friday is placed while 11620 is the 61.8% retracement level of the recent 11760-11394 fall, making 11603-11620 an immediate resistance zone, a crossover of which is required for a fresh upmove. 11760 would be the next target if that happens.

11394 continues to be important support.