10860 BELOW 10945; 11140-11220 CONTINUES TO BE RESISTANCE ZONE

10860 BELOW 10945; 11140-11220 CONTINUES TO BE RESISTANCE ZONE

WORLD MARKETS

Dow gained 0.1%, extending the winning streak to eight straight day while S & P 500 and Nasdaq fell 0.1% and 0.2% respectively on Friday.

Sentiment around the trade war improved after the New York Times reported Friday that China will exempt some U.S. agricultural products, including soybeans and pork, from additional tariffs. Earlier on Thursday, US President Trump said he would not rule out an interim trade deal with China.

On the data front, consumer sentiment for September topped expectations as consumers felt better about the economy.

European markets gained 0.2%-0.6%. The euro zone’s trade surplus in goods with the U.S. hit a record high in July. Exports to the U.S. rose to 32.8 billion euros, their highest level since records began in 1999, while imports into the bloc from the U.S. rose to 18 billion euros.

AT HOME

After falling about a third of a percent in the first hour, benchmark indices soared more than a percent from the bottom of the day to end higher by eight tenth of a percent. Sensex settled at 37384, up 280 points while Nifty added 93 points to finish at 11075. BSE mid-cap and small-cap indices rose 0.4% and 0.8% respectively. Except 0.5% and 0.4% lower Telecom and Healthcare indices respectively, all the BSE sectoral indices ended in green with Oil & Gas and Consumer Durable indices leading the tally, up 2.7% and 1.9% respectively.

FIIs net sold stocks worth Rs 405 cr but net bought index futures and stock futures worth Rs 300 cr and 127 cr respectively. DIIs were net buyers to the tune of Rs 210 c.

Rupee appreciated 21 paise to end at 70.91/$.

For the week, Sensex and Nifty gained 1.1% and 1.2% respectively.

Finance minister Nirmala Sitharaman on Saturday announced a slew of measures to boost exports and the flagging housing sector. The first one is a new export promotion scheme for the remission of duties or taxes on export products. This scheme will completely replace Merchandise Exports from India Scheme (MEIS) and Rebate of State Levies (ROSL). The second announcement is the set-up of a Rs 10,000 crore special fund, a special window for affordable and mid-income housing. The fund will provide the last-mile funding for housing projects that are non-NPA and non-NCLT projects and are stuck due to lack of funding.

OUTLOOK

Over the weekend, drone attacks hit Saudi Arabia’s oil production facilities which led to stoppage of half the country’s oil production which represent around 5% of world oil output.  Owing to this Brent is up 11.5% at $67.12 per barrel while WTI is up 10.4% at 60.54 in today’s trade.

Today, Nikkei is shut while Hang Seng is down half a percent and Shanghai is up about 0.4%. SGX Nifty is suggesting about 90 points lower start for our market.

In Friday's report we had reiterated the view that 11140-11220 continues to be next target zone and had advised holding on to long positions with the stop-loss of 10930.

Nifty, after touching a low of 10945, reversed and surged all the way to 11084 before closing at 11075 but is set to open below 11000 today.

10945, the low made on Friday, is the immediate support, upon breach of which, 10860, where a trendline adjoining recent bottoms on the daily chart is placed, would be the next support to eye.

11141-11220 continues to be upside target/resistance zone where 11141 and 11181 are the tops made on 27th August and 9th August respectively while 11220 is where 200-DMA is placed.