NIFTY ACHIEVES 10800 TARGET; 10990 IS IMMEDIATE HURDLE

NIFTY ACHIEVES 10800 TARGET; 10990 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow and Nasdaq tumbled 1.1% while S & P 500 fell 0.7% after US and China began imposing new tariffs on each other’s goods and weak manufacturing data dented sentiment.

The U.S. imposed 15% tariffs on a variety of Chinese goods on Sunday, while China imposed new charges on U.S. products from Sept. 1. On Monday, Beijing filed a complaint against Washington at the World Trade Organization over U.S. import duties. China claimed the latest round of tariffs violated a consensus reached by leaders of both countries in Osaka, Japan

The Institute for Supply Management said U.S. manufacturing activity contracted last month for the first time since early 2016.

WTI crude futures fell $1.68, or 3.1%, to $53.42 a barrel while Brent lost 92 cents, or 1.6%, to $57.74.

Spot gold rose 0.83% to $1,543.11 per ounce. The 30-year Treasury yield traded at 1.95% after hitting an all-time low last week. The 10-year note yield fell to 1.47%.

European markets fell 0.2%-0.5%. Sterling broke below $1.20 in early trade amid Britain’s political uncertainty. It recovered slightly to trade at $1.2088 by the end of the European session as rebel lawmakers applied for an emergency debate in parliament in the hope of thwarting a no-deal Brexit.

On the data front, U.K. construction PMI data missed forecasts, indicating further drags from political uncertainty. Euro zone producer prices inched up in July after four months of decline, due to an increase in energy prices.

AT HOME

Sesnex and Nifty nosedived just over 2%, registering biggest percentage fall since 11th October 2018 and 8th July 2019 respectively. Sensex settled at 36562, down 770 points while Nifty lost 225 points to finish at 10797. BSE mid-cap and small-cap indices fell 1.6% and 1.3% respectively. All the BSE sectoral indices ended in red with Metal and Energy indices leading the losses, down 3.2% and 3% respectively.

FIIs net sold stocks and stock futures worth Rs 2016 cr and 904 cr respectively but net bought index futures worth Rs 214 cr. DIIs were net buyers to the tune of Rs 1251 cr.

Rupee depreciated 100 paise to end at 72.40/$.

OUTLOOK

Today morning, Hang Seng is up a percent while Shanghai and Nikkei are little changed. SGX Nifty is suggesting about 15 points higher start for our market.

After Nifty broke immediate support of 10915, we were working with downside targets of 10830 followed by 10800, which were the 61.8% and 67% retracement levels of the recent 10637-11141 upmove.

Nifty yesterday plunged all the way to 10772 before closing at 10797, achieving 10800 target and vindicating our view.

10637, the bottom made in August, is the next downside target/support to eye. If that gives way, 34-month moving average, placed around 10460, would be the next crucial support to eye.

Meanwhile, immediate hurdle on the hourly chart is placed around 10990, with the stop-loss of which, trading shorts can be held on to.