NIFTY SET TO REBOUND AFTER TESTING 11585 SUPPORT; 11707 IMMEDIATE HURDLE

NIFTY SET TO REBOUND AFTER TESTING 11585 SUPPORT; 11707 IMMEDIATE HURDLE

WORLD MARKETS

Dow ended flat while S & P 500 and Nasdaq gained 0.4% and 0.3% respectively after comments from a U.S. Federal Reserve official led to rising expectations the central bank could ease monetary policy more than expected.

New York Federal Reserve President John Williams said the central bank needed to “act quickly” when the economy was slowing and rates were low. “It’s better to take preventative measures than to wait for disaster to unfold, ” he said in a speech.

Netflix shares plunged more than 10% after reporting a surprise loss in U.S. subscribers coupled with slower-than-expected international membership growth. IBM shares briefly fell at the open before recovering after the company reported its fourth consecutive revenue decline. Morgan Stanley posted better-than-expected quarterly results.

WTI crude futures fell $1.48 or 2.6% to $55.30 and Brent futures fell $1.94 or 3% to $61.72 on expectation that crude output would rise in the Gulf of Mexico following last week’s hurricane in the region. Tensions in the Middle East heated up further on Thursday, with U.S. President Donald Trump saying an American Navy ship had destroyed an Iranian done in a “defensive action. ” The announcement came hours after Iranian forces seized a foreign tanker it accused of smuggling oil.

European markets fell 0.4%-0.9% with DAX leading the losses. U.K. retail sales for June unexpectedly rose by 1% month-on-month, substantially exceeding analyst expectation.

AT HOME

Benchmark indices tumbled eight tenth of a percent, breaking three-day winning streak. Sensex lost 318 points to settle at 38897 while Nifty finished at 11596, down 90 points. Nifty mid-cap and small-cap indices nosedived 1.7% and 1.1% respectively to close at lowest level since 16th May and 28th February respectively. All the BSE sectoral indices ended in red with Auto and Metal indices leading the losses, down 2.6% and 2.4% respectively.

FIIs net sold stocks and stock futures worth Rs 1405 cr and 704 cr respectively but net bought index futures worth Rs 1368 cr. DIIs were net buyers to the tune of Rs 329 cr.

Rupee depreciated 14 paise to end at 68.95/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.5%-1.5% with Nikkei on the top and SGX Nifty is suggesting about 30 points higher start for our market.

In yesterday's report we had reiterated the view that 11721, the 50% retracement level of the recent 11981-11461 is the immediate hurdle and had advised trailing the stop-loss in long positions to 11585.

Nifty, after touching a low of 11582, closed at 11596 and is set to open higher today.

11582, the low made yesterday, which also coincided with our indicated support, continues to be immediate support to eye. Below 11582, 11532 and 11461, the lows made on Monday and last week respectively, would be next supports to eye.

11707, the top made on Wednesday, is the immediate hurdle.

Traders are advised to keep stop-loss of 11582 in trading longs.