11000 IS THE NEXT SUPPORT; TRAIL STOP-LOSS TO 11267

11000 IS THE NEXT SUPPORT; TRAIL STOP-LOSS TO 11267

WORLD MARKETS

US indices fell 0.1%-0.3% after Trump's renewed attacks on China decreased hope of trade deal between the two largest world economies.

In a series of tweets Tuesday, Trump said that China is not keeping its promise of buying more U.S. agricultural products. For its part, China insists that it has bought U.S. agricultural products.

Merck posted earnings and revenue that exceeded expectations. Procter & Gamble climbed more than 3% and hit an all-time high after results beat expectations. GrubHub, however, fell more than 12% after posting a disappointing profit.

Brent futures rose $1.27, or 2.0% to $64.98 a barrel while WTI rose $1.40, or 2.5%, to $58.27 to close at a two-week high, on optimism the U.S. Federal Reserve will cut interest rates for the first time in more than 10 years.

European markets tumbled 0.5%-2.2% after digested earnings and renewed U.S.-China trade uncertainty. Pound hit a 28-month low against dollar as fears of the U.K. leaving the European Union without a deal escalate.

AT HOME

After gaining more than half a percent in the initial trade, Sesnex and Nifty nosedived to end with cuts of 0.7% and 0.9% respectively. Nifty closed at the lowest level since 8th March while Sensex settled at worst level since 16th May. Sensex settled at 37397, down 289 points while Nifty lost 103 points to finish at 11085. Nifty mid-cap and small-cap indices nosedived 1.9% and 2.6% respectively to close at lowest level since 31st January 2017 and 22 November 2016 respectively, marking a more than 2-1/2 year low. BSE Metal and Energy indices tumbled 3.2% and 2.4% respectively, becoming top losers among the sectoral indices while Telecom index was the top gainer, up 0.9%, followed by 0.7% higher Teck and IT indices.Rupee

FIIs net sold stocks worth Rs 645 cr but net bought index futures and stock futures worth Rs 939 cr and 1199 cr respectively. DIIs were net buyers to the tune of Rs 1080 cr.

Rupee depreciated 13 paise to end at 68.86/$.

Axis Bank's net profit missed estimates while NII met expectation and asset quality remained stable. NII . Gross NPA ratio improved 1 bps q-o-q to 5.25% and net NPA ratio improved 2 bps to 2.04%. Gross slippages hit a four-quarter high at Rs 4798 cr.

Tech Mahindra results missed estimates on dollar revenue and margin front.

Hero MotoCorp. reported dismal set of numbers which were largely in-line with estimates. Revenue fell 8.8% y-o-y to Rs 8030 cr, EBITDA fell 15.9% to Rs 1158 cr, margin dipped 120 bps to 14.4% and net profit, aided by one-time-gain, was up 38.3% at Rs 1257 cr.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.4%-1% and SGX Nifty is suggesting about 30 points lower start for our market.

At the risk of repeating, we have been negative on Nifty ever since 11580 support was taken out and have been advising holding on to short position with a trailing stop-loss.

In yesterday's report we had said that 11140-11108 was an important support zone where 11140 coincided with 200-DMA while 11108 was the bottom made in May. We has also said that if 11108 breaks, 20-month moving average, placed around 11000, would be next crucial support and had advised holding on to short positions with the stop-loss of 11310.

Nifty, after touching a high of 11267 in the initial trade, plunged to touch a low of 11072 before closing at 11085 and is set to open lower today.

20-month moving average, placed around 11000, continues to be next important support to eye. If this level breaks decisively, 10585, the bottom made in February, would be the next meaningful support.

11267, the top made yesterday, would act as immediate hurdle, with the stop-loss of which, trading shorts should be held on to.

Eicher Motors, IOC and UPL will report their quarterly earnings today.

Fed is set to deliver its decision on interest rates today, with expectations that it will cut interest rates by a quarter point. Investors will also look for clues from Powell about potential rate cuts later this year.