10355-10325 IS THE SUPPORT ZONE

10355-10325 IS THE SUPPORT ZONE

WORLD MARKETS

US indices fell 1.3%-2.1% with Nasdaq leading the losses on worries over the U.S.-China trade war, rising interest rates and concerns over possible overvalued U.S. tech stocks.

Treasury yield rose after the minutes of latest Fed meeting showed on Wednesday that the central bank is still convinced tighter monetary policy is the best course of action for the economy to remain steady. The two-year yield hit its highest level since June 2008 before slipping. The benchmark 10-year note yield climbed to 3.205%.

National Economic Council Director Larry Kudlow, speaking at the Detroit Economic Club, said about China that "They are unfair traders. They are illegal traders. They have stolen our intellectual property," and added that "China has not responded positively to any of our asks."

Concerns over Saudi also persisted as Treasury Secretary Steven Mnuchin pulled out of a Saudi Arabia investment conference.

US oil fell, after plunging 3% on Wednesday, fell another 1.6% yesterday to touch$68.65 after U.S. crude stocks increased sharply by 6.5 million barrels in the previous week. Brent fell 67 cents to $79.38 a barrel.

Meanwhile Dow-member Travelers, Bank of New York Mellon, BB&T and Danaher were among the companies that reported better-than-expected earnings before the bell.

European markets fell 0.45-1.9% with Italy leading the losses as Italian bond yields climbed to their highest level since February 2014 following comments from ECB President Mario Draghi that one of the risks for the economy was countries trying to circumvent EU budget rules.

Meanwhile, China's Shanghai Composite plunged 3% yesterday to touch a 4-year low.

AT HOME

After gaining more than a percent in the initial trade, benchmark indices saw a sustained downward move through the session to end with cuts of more than a percent, breaking three-day winning streak. Sensex settled at 34779, down 383 points while Nifty lost 131 points to finish at 10453. BSE mid-cap and small-cap indices tumbled 2.2% each. Except a 0.1% higher FMCG index and flat IT index, all the BSE sectoral indices ended in red with Realty index and Bankex leading the losses, down 3.2% and 3% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 140 cr, 1077 cr and 44 cr respectively. DIIs were net sellers to the tune of Rs 343 cr.

Rupee depreciated 14 paise to end at 73.60/$.

Indiabulls Housing tumbled 14% on concerns over its exposure to SuperTech Ltd., a property developer whose credit facilities have been downgraded to default.

OUTLOOK

China's third quarter GDP growth has come in at 6.5%, lower than previous quarter's 6.7% and estimated 6.6% figures.

Today morning, Asian markets are trading with cuts of 0.65-1% and SGX Nifty is trading around 10320, suggesting a whooping 120 points lower start when compared to Wednesday's close of Nifty futures.

After 10480-10547 resistance zone was taken out, we had suggested that upmove can extend to 200-DMA placed around 10780. We had also said that 10440 was the immediate support on the hourly chart.

Nifty, after touching a high of 10710 on Wednesday, slipped to touch a low of 10436 before closing at 10453 and is set to open below 10350 today.

10355 and 10327 are the 61.8% and 67% retracement levels of the recent 10138-10710 upmove, making 10355-10327 important support zone. Upon breach of this support, 10138, the bottom made last week, would be the crucial support to eye.

Ultratech Cement will report its quarterly earnings today.