10637 BELOW 10746; 10980 IS IMMEDIATE HURDLE

10637 BELOW 10746; 10980 IS IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 1%-1.3% as tensions in Hong Kong between the government and protesters eased after the withdrawal of a controversial bill. Gains in banking and technology stocks and economic data from China also helped the gains.

Bank stocks got a boost as the U.S. yield curve uninverted, with the 10-year rate trading above its 2-year counterpart.

Hang Seng surged 4% after Hong Kong leader Carrie Lam said that she will withdraw a contentious extradition bill that has sparked months of mass protests.

Data earlier showed China’s Caixin/Markit Services PMI came in at 52.1 in August — its highest reading since May, despite broader economic headwinds.

Sentiment also got a boost after New York Fed President said in a speech the central bank will act as appropriate to sustain the current economic expansion.

Brent crude surged 4.14%, to $60.66 a barrel, while U.S. West WTI crude rose 4.3%, to $56.26.

European markets rose 0.6%-1.6% after British lawmakers defeated Prime Minister Boris Johnson’s government in a vote to seize control of parliamentary business, moving closer to blocking a no-deal Brexit.

AT HOME

After falling about half a percent in the initial trade, benchmark indices reverse the losses to end higher by four tenth of a percent. Sensex settled at 36724, up 161 points while Nifty added 46 points to finish at 10844. BSE mid-cap and small-cap indices gained 0.1% and 0.3% respectively. BSE Telecom and Metal indices soared 1.9% and 1.7% respectively, becoming top gainers among the sectoral indices while Auto and Consumer Durable indices were the top losers, down 1.7% and 1.3% respectively.

FIIs net sold stocks worth Rs 1738 cr but net bought index futures and stock futures worth Rs 1039 cr and 76 cr respectively. DIIs were net buyers to the tune of Rs 1305 cr.

Rupee appreciated 28 paise to end at 72.11/$.

Maruti shares plunged 3.6% after announcing no-production days at Gurugram and Manesar plants on 7th and 9th September. Sun Pharma tumbled 2.9% after SEBI ordered a forensic audit against the company.

OUTLOOK

Today morning, Nikkei and and Shanghai are trading with gains of 1.7% and 0.9% respectively while Hang Seng is little changed. SGX Nifty is suggesting a flattish start for our market.

After Nifty achieved 10800 target, we had given next downside target of 10637 in yesterday's report. Nifty, after touching a low of 10746, reversed to end at 10844.

Immediate hurdle on the hourly chart is placed around 10980.

10746, the low made yesterday, is the immediate support, upon breach of which 10637, the bottom made in August, would be the crucial support to eye.

Meanwhile, positional shorts can be held on to with the stop-loss of 10980.