10855-10833 IS THE NEXT SUPPORT ZONE; 11041 IMMEDIATE HURDLE

10855-10833 IS THE NEXT SUPPORT ZONE; 11041 IMMEDIATE HURDLE

WORLD MARKETS

Dow fell 0.2% while S & P 500 and Nasdaq gained 0.1% each on Friday amidst worries over U.S.-China trade negotiations as well as slowing economic growth.

Media reports on Friday said that the two countries have not yet put together a draft on the matters they agree or disagree. Furthermore, fresh reports indicated that Trump could sign an order next week banning Chinese telecommunication equipment from U.S. wireless networks.

US crude rose 8 cents to $52.72 per barrel and Brent gained 51 cents to $62.14.

The European Commission lowered euro zone growth forecast to 1.3% in 2019, from a previously forecast 1.9%. The BOE, meanwhile, said it saw its worst outlook for the U.K. economy this year since 2009.

European markets fell 0.3%-1%.

For the week, Dow and Nasdaq gained 0.2% and 0.5% respectively, extending the winning streak to seventh consecutive week while S & P 500 ended flat. In Europe, FTSE gained 0.7% but DAX and CAC tumbled 2.4% and 1.1% respectively. In Asia, Nikkei nosedived 2.2% while Nifty and Hang Seng rose 0.5% and 0.1% respectively. US crude fell 4.6% while Brent was off 1%.

AT HOME

Sensex and Nifty nosedived 1.1% each, with Nifty breaking six-day winning streak. Sensex settled at 36546, down 425 points while Nifty lost 125 points to finish at 10943. BSE mid-cap and small-cap indices fell 1.4% and 0.9% respectively. Except 1.7% and 1.1% higher Telecom and Realty indices respectively, all the BSE sectoral indices ended in red with Metal and Auto indices leading the losses, down 3.4% each, followed by 2.6% lower Industrials index.

FIIs net bought stocks worth Rs 844 cr but net sold index futures and stock futures worth Rs 224 cr and 799 cr respectively. DIIs were net sellers to the tune of Rs 960 cr.

Rupee appreciated 15 paise to end at 71.30/$.

For the week, Sensex and Nifty gained 0.2% and 0.4% respectively, extending the winning streak to second consecutive week.

Tata steel's consolidated revenue were in-line but profit and margin disappointed at Rs 1751 cr and 16.3% respectively. India business disappointed with lower than EBITDA/tonne.

BPCL posted better-than- estimated earnings.  Core refining margins and reported refining margins at $6 and $3 per barrel, were much better than expected.

M & M reported mixed set of earnings. Revenue came in-line but auto segment margin fell 250 bps. The company cut tractor industry growth guidance to 10% v/s 12-14% earlier.

OUTLOOK

Today morning, Asian markets are trading flat to modestly lower and SGX Nifty is suggesting about 30 points lower start for our market.

In Friday's repot we had said that 10930 was the immediate support on the hourly chart which should serve as the stop-loss for trading longs. Nifty touched a low of 10925 before closing at 10943 and is set to open below Friday's low today.

10855 followed by 10833, where 200 and 34-DMAs are placed respectively, are the next downside targets/supports to eye.

11041, the top made on Friday, is the immediate hurdle above which 11118, the top made last week, would be the bigger resistance to eye.

Eicher Motors and Motherson Sumi will report their quarterly earnings today.