NIFTY REBOUNDS AFTER TESTING 34-WEEK MOVING AVERAGE; 11145 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER TESTING 34-WEEK MOVING AVERAGE; 11145 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.5% while S & P 500 ended flat and Nasdaq fell half a percent, with the Dow hitting a record high , boosted by gains in Intel and optimism around global trade.

US equities had strong gains on Monday after Canada joined the U.S. and Mexico in a new trade deal. The United States-Mexico-Canada Agreement, or "USMCA" for short, will see all three countries compromise on certain trade aspects. More market access will be granted to U.S. dairy farmers, while Canada has agreed to effectively cap automobile exports to the States.

US crude fell 7 cents to settle at $75.23 a barrel, having hit a nearly four-year high of $75.91 earlier in the session. Brent fell 32 cents to $84.66 after reaching a new four-year high of $85.45 in the previous session.

European markets fell 0.2%-1% with Spain leading the losses on worries over Italy's budget. Luigi Di Maio, the head of the Five Star Movement in Italy, defended the country's 2.4 percent deficit target for 2019. A prominent Italian lawmaker said Rome would enjoy more favorable economic conditions outside the euro zone.

AT HOME

After falling a percent in the morning, Sensex and Nifty saw a steep rebound in noon to end higher by 0.8% and 0.7% respectively, breaking 3-day losing streak. Sensex settled at 36526, up 299 points while Nifty added 78 points to finish at 11008. BSE mid-cap index rose 0.5% but small-cap index fell 0.2%. BSE IT and Teck indices climbed 2.4% and 2% respectively, becoming top gainers among the sectoral indices while Realty index fell 1.4%, becoming top loser, followed by 1.3% lower Energy and Telecom indices.

FIIs net sold stocks worth Rs 1842 cr but net bought index futures and stock futures worth Rs 9 cr and 417 cr respectively. DIIs were net buyers to the tune of Rs 1805 cr.

Rupee depreciated 43 paise to end at 72.91/$.

Maruti posted 0.5% y-o-y dip in September sales at 1.62 lakh units. Bajaj Auto sales jumped 17% to 5.02 lakh units and TVS Motors sold 17.8% higher vehicles at 4.24 lakh units. Ashok Leyland sold 19373 units, a growh of 26% while Tata Motors sales were up 20.1% at 69500 units. Eicher Motors' Royal Enfield sales were up 2% at 71662 units. Hero MotoCorp sales rose 6.8% to 7.69 lakh units.

India's Nikkei Manufacturing PMI strengthened slightly in September to 52.2, up from 51.7 in August.

GST collection for August stood at Rs 94,442 crore compared with Rs 93,960 crore in July.

Stocks of IL&FS Engineering and IL&FS Transport hit 20% upper circuit after government moved to National Company Law Tribunal (NCLT) in Mumbai, seeking to supersede IL&FS' board with a new board led by veteran banker Uday Kotak.

The National Company Law Tribunal (NCLT) approved the takeover of IL&FS board by government nominees. A new six-member board led by Uday Kotak will take charge of the company. The newly constituted board will submit an assessment plan in the next two weeks.

OUTLOOK

Markets in China and South Korea are shut today. Nikkei and Hang Seng are down 0.6% and 0.2% respectively while SGX Nifty is trading around 11020, suggesting about 40 points lower start when compared to Monday's close of Nifty futures.

At the risk of repeating, we have been mentioning that 10866-10770 is the crucial support zone for Nifty as 10866 is where trendline adjoining bottoms made in December 2016 and March 2018 is placed while 34-week moving average and 200-DMA are placed around 10800 and 10770 respectively.

Nifty touched a low of 10821 on Monday where 34-week moving average was placed. From there, it rebounded sharply to end at 11008 but is slated to open lower today.

10820, which coincided with 34-week moving average, followed by 200-DMA placed at 10775, continues to be crucial supports to eye.

11145, the top made last Wednesday, is the immediate hurdle, a crossover of which is required for a fresh upmove.