12000, 12103 UPSIDE TARGETS TO EYE; TRAIL STOP-LOSS TO 11800

12000, 12103 UPSIDE TARGETS TO EYE; TRAIL STOP-LOSS TO 11800

WORLD MARKETS

US indices rose 0.2%-0.3% on optimism over US-China trade deal, but gains were capped by concerns that the U.S. could bring its tariff threat to Europe.

Trump said Monday that trade talks with China were back underway after the leaders met on the sidelines of the G-20 summit in Osaka, but added that any deal would need to be somewhat tilted in Washington’s favor. On the flip side, Washington on Monday threatened to impose tariffs on $4 billion of additional European Union goods in a long-running dispute over aircraft subsidies.

Bank shares fell as the benchmark 10-year yield traded around 1.97% while the 2-year rate fell to 1.76%.

Brent crude fell $2.61, or 4.01%, to $62.45 a barrel and U.S. West Texas Intermediate (WTI) crude fell $2.84, or 4.8%, to $56.25 on demand worries. Gold jumped 1.5% to $1,405.22 per ounce as U.S. Treasury yields fell.

European markets gained upto 0.8% with FTSE on the top. British 10-year government bond yield to fell to its lowest level since October 2016 after data showed that U.K. construction activity suffered its sharpest downturn in over a decade in June on the back of rising Brexit concern.  German retail sales were down 0.6% for the month versus estimate of +0.5%. The 10-year German Bund yield dropped to a new all-time low of -0.363% before recovering.

AT HOME

After falling about four tenth of a percent, benchmark indices reversed to end higher by four tenth of a percent, extending the winning streak to second day. Sensex settled at 39816, up 130 points while Nifty added 44 points to finish at 11910. BSE mid-cap index too gained 0.4% but small-cap index ended flat. BSE Oil & Gas and Energy indices gained 1.1% and 0.9% respectively, becoming top gainers among the sectoral indices while Realty index tumbled 1.8%, becoming top loser, followed by 0.6% lower Healthcare index.

FIIs net sold stocks and index futures worth Rs 512 cr and 125 cr respectively but net bought stock futures worth Rs 359 cr. DIIs were net buyers to the tune of Rs 141 cr.

Rupee appreciated 2 paise to end at 68.92/$.

Yes Bank nosedived on reports that Radius, a Mumbai-based Developer, has defaulted on scheduled interest payments on a Rs 1,200-crore loan from the Bank.

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.5%-0.8% but SGX Nifty is suggesting about 15 points higher start for our market.

In yesterday's report we had reiterated our positive bias on the Nifty and had said that long positions should be held with the stop-loss of 11775. We had also said that once 11911, the top made last week is taken out, 12000 and 12103, the previous tops on daily chart, would be subsequent targets to eye.

Nifty touched a high of 11917 before closing at 11910 and is set to open higher today.

12000, followed by 12103, the tops made on 11 and 3 June respectively, continue to be upside targets to eye.

34-DMA, which has now moved up to 11800, will act as the immediate support and traders are advised to continue holding the long positions with the stop-loss of the same.