34-DMA LANDS SUPPORT AT 11750; 11911 IS IMMEDIATE HURDLE

34-DMA LANDS SUPPORT AT 11750; 11911 IS IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 0.3%-0.6%, boosted by bank shares, and looking forward to a key meeting between US President Donald Trump and Chinese President Xi Jinping

J.P. Morgan Chase jumped 2.7% while Citigroup, Bank of America, Goldman Sachs and Wells Fargo all closed more than 2% higher after they passed the Fed’s annual stress test and got approval to boost dividends and share repurchase programs.

US oil fell 96 cents or 1.6% to $58.47 a barrel while Brent after the remaining parties to the Iran nuclear deal vowed to help normalize trade with the Middle Eastern nation.

European markets gained 0.3%-1%. Euro zone inflation was stable at 1.2% in June.

For the week, US indices fell 0.3%-0.4%. European markets gained 0.2%-0.5%. In Asia, Shanghai fell 0.8% While Nikkei and Hang Seng rose 0.1% and 0.2% respectively. Indian indices gained about half a percent. WTI crude gained 1.3%.

AT HOME

Benchmark indices fell half a percent on Friday, extending the losing streak to second straight day. Sensex lost 191 points to settle at 39394 while Nifty finished at 11788, down 52 points.  BSE mid-cap and small-cap indices outperformed yet again, falling 0.3% and 0.1% respectively. BSE Energy and Metal indices tumbled 1.5% and 1.1% respectively, becoming top losers among the sectoral indices while Realty and Consumer Durable indices gained 0.6% and 0.4% respectively, becoming top gainers.

FIIs net sold stocks and index futures worth Rs 514 cr and 436 cr respectively but net bought stock futures worth Rs 361 cr. DIIs were net buyers to the tune of Rs 182 cr.

Rupee appreciated 5 paise to end at 69.01/$, the strongest level since April 1, marking a two-month high.

For the week, Sensex and Nifty gained half a percent each, breaking three-week losing streak.

Data released on Friday showed India’s current account deficit (CAD) widened to $57.2 billion, or 2.1% of GDP, in FY19 from 1.8% a year ago. However, in the quarter ended March 2019, the deficit narrowed to 0.7% of the GDP at $4.6 billion, compared with 2.7% or $17.7 billion, in the October-December period

Meanwhile, fiscal deficit during the first two months of the current fiscal stood at Rs 3.66 trillion, which is 52% of the budged estimate for the full year.

OUTLOOK

US President Trump and Chinese President Xi, on Saturday, said that they did not plan to levy any new tariffs against each other’s products at the present time.  Trump also said he will be reversing his government’s decision to ban American companies from selling products to the Chinese telecommunications behemoth, Huawei.

Meanwhile, data released Sunday showed China's manufacturing PMI remained unchanged at 49.4 in June, but was lower than the expected 49.5 figure.

Today morning, Asian markets are trading with gains of 1.2%-1.7% and SGX Nifty is suggesting a marginally  higher start for our market.

In Friday's report we had said that "Immediate support on the hourly chart has moved up to 11780, with the stop-loss of which, trading longs should be held on to".

Nifty, after touching a low of 11775 closed at 11788 and is set to open around 11800 today.

34-DMA, placed around 11750, is the immediate support to eye. If that breaks, 11650, the bottom made last week, would be the next support.

11911, the top made last week, would be the immediate hurdle to eye upon crossover of which 12000, the top made on 11^th June, would be the next target.

Meanwhile, traders are advised to hold long positions with the stop-loss of 11750.

Auto companies will report June sales figures today.