NIFTY TUMBLES AFTER TESTING 11600 HURDLE; 11394 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY TUMBLES AFTER TESTING 11600 HURDLE; 11394 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

Dow fell 0.2% while S & P 500 and Nasdaq rose 0.2% and 0.3% respectively, snapping a four-day losing streak as tech shares rebounded.

Apple however dropped 1.3% after President Donald Trump pressured the company to make its products in the U.S.

The White House announced that it was in the process of coordinating a second meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un.

US crude futures settled down 21 cents at $67.54 a barrel while Brent crude oil was up 35 cents at $77.18.

Main European markets gained 0.4%-0.5% while Italy and Spain soared 2.2% and 1.3% respectively.  Italian banks surged on reassurances from the government that the 2019 deficit will not disrespect European fiscal rules.

EU's chief Brexit negotiator, Michel Barnier, said that he thought it was "realistic" to expect a deal to be reached within six to eight weeks. Sterling rallied on these comments, rising 0.8% against the dollar and hitting a five-week high.

Balance of trade numbers out in the U.K. showed the trade deficit with the EU at its smallest level since April 2016. Other data showed the British economy grew at its fastest pace in nearly a year in the second-quarter.

AT HOME

Sensex and Nifty nosedived 1.2% and 1.3% respectively, suffering the worst fall after 23rd March and 16th March respectively. Sensex lost 467 points to settle at 37922 while Nifty finished at 11438, down 151 points. BSE mid-cap and small-cap indices fell 1.7% and 1.1% respectively. Except a 0.02% higher IT index, all the BSE sectoral indices ended in red, with Auto index leading the losses, down 1.8%, followed by 1.7% lower Metal and Energy indices.

FIIs bet sold stocks, index futures and stock futures worth Rs 842 cr, 631 cr and 708 cr respectively. DIIs were net sellers to the tune of Rs 290 cr.

Rupee depreciated 72 paise to end at 72.45/$.

OUTLOOK

Today morning, Hang Seng and Shanghai are little changed while Nikkei is up 0.8%. SGX Nifty is suggesting a marginally lower start for our market.

While Nifty was in a recovery mode after testing 34-DMA support of 11394, we had cautioned that a crossover of immediate hurdle placed around 11600 is required for a fresh upmove.

The benchmark, after touching a high of 11603 on Friday, plunged to close at 11438 yesterday, vindicating our view.

11394, the bottom made last week, continues to be immediate support to eye, upon breach of which, 11300, the 38.2% retracement level of the entire 10557-11760 upmove, would be the next support to eye.

11603, the top made last week, continues to be immediate hurdle.