NIFTY REBOUNDS AFTER ACHIEVING 200-DMA TARGET; 10985 IS IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 200-DMA TARGET; 10985 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow fell 0.2% while S & P 500 and Nasdaq rose 0.1% each, weighing the possibility of the U.S. and China striking a deal to end the ongoing tariff war.

Officials from Washington and Beijing will continue talks this week with a focus on intellectual property.

Meanwhile, U.S. Secretary of State Mike Pompeo warned America's allies against using equipment from Chinese telecommunications giant Huawei.

US crude fell 0.6% to $52.41 a barrel while Brent eased 63 cents, or 1% to $61.46.

Dollar index rose about 0.4% to 97.07, its highest finish in nearly two months.

European markets climbed 0.8%-1.2%. British GDP growth in final three months of 2018 slipped to a quarterly rate of 0.2% from 0.6% in the previous quarter.

AT HOME

Sensex and Nifty fell 0.4% and 0.5% respectively, extending the losing streak to second consecutive day. Sensex settled at 36395, down 151 points while Nifty lost 55 points to finish at 10888. BSE mid-cap and small-cap indices tumbled 1.5% each to close at 3-1/2 month low. Except 0.2% higher IT and Teck indices, all the BSE sectoral indices ended in red with Healthcare index leading the losses, down 1.9%, followed by 1.5% lower FMCG and Capital Goods indices.

FIIs net sold stocks and stock futures worth Rs 125 cr and 552 cr respectively but net bought index futures worth Rs 275 cr. DIIs were net sellers to the tune of Rs 233 cr.

Rupee appreciated 13 paise to end at 71.16/$.

Dr Reddy tumbled after US FDA issued 11 observations to its formulations manufacturing plant-3 at Bachupally.

OUTLOOK

Today morning, Nikkei is up nearly 2% while Hang Seng and Shanghai are little changed. SGX Nifty is suggesting a flattish start for our market.

After Nifty broke the immediate support of 10930, we had said that 10855-10833 is the next support zone where 200 and 34-DMAs are placed respectively.

Yesterday, Nifty, after touching a low of 10857, rebounded to end at 10888 and is set to open flat today.

10857, the low made yesterday, is the immediate important support to eye. It this support breaks, 10700, where the upward sloping trendline adjoining bottoms made in December and January is placed, would be the next support to eye.

On the way up, 10985 is the immediate hurdle on the hourly chart, above which 11118, the top made last week, would be the bigger resistance to eye.

Sun Pharma, Hindalco and Coal India will report their quarterly earnings today.

In terms of economic data, December IIP is expected to show a print of 2.3%, up from 0.5% in the previous month while January CPI is expected at 2.33% vs 2.19%.