NIFTY NEARS 10637 TARGET AFTER ACHIEVING 10746

NIFTY NEARS 10637 TARGET AFTER ACHIEVING 10746

WORLD MARKETS

Dow fell 0.2%, S & P 500 finished flat while Nasdaq ended marginally higher after some media reports dented hopes of US-China trade deal.

A state-backed Chinese media report said that known China hawk and Trump advisor Michael Pillsbury warned the U.S. is ready to escalate the trade war if a deal isn’t struck soon. Also, a tabloid editor at the official newspaper of the Communist Party of China tweeted that China was in no rush to make a trade deal with the U.S.

Brent futures gained 72 cents to $64.33 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13.

European markets gained 0.6%-1.2%. The Bank of England held interest rates steady at 0.75% amidst continued uncertainty over Brexit.

AT HOME

After yesterday's pause, bulls were back to work as benchmark indices plunged nearly a percent and third to close at the lowest level since 1st March and 19th February respectively, marking a near seven month low. Sensex settled at 36093, down 470 points while Nifty lost 136 points to finish at 10704. BSE mid-cap and small-cap indices fell 1.2% and 1.5% respectively.  Except 0.2% lower Telecom index, all the BSE sectoral indices ended in red with Energy and Oil & Gas indices leading the losses, down 2% and 1.9% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 893 cr, 1700 cr and 408 cr respectively. DIIs were net buyers to the tune of Rs 646 cr.

Rupee depreciated 8 paise to end at 71.31/$.

Yes Bank plunged after CARE downgraded NCDs of the bank's promoter, MCPL. After market hour filing revealed that Morgan Crdit sold 2.3% shareholding in the bank. ZEEL fell after media reports suggested that Zee promoters met MF lenders for an extension of the September 30 deadline for the repayment of debt.

Finance Minister Nirmala Sitharaman, in a bid to push credit, said banks will orgainse loan gatherings across 200 districts. Also, MSME stressed loans will not be declared NPAs till March 2020.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-0.5% and SGX Nifty is suggesting a marginally higher start for our market.

In yesterday's report we had reiterated the view that "10746, the low made on 4th September, continues to be next downside support, upon breach of which, 10637, the low made in August, would be the crucial support".

Nifty, after achieving 10746 target, went further to touch a low of 10670 before closing at 10704, vindicating our negative bias.

10637, the bottom made in August, continues to be crucial support to eye. If that breaks, next meaningful support will come around 10450, where 34-month moving average is placed.

Immediate hurdle on the hourly chart has moved lower to 10900, with the stop-loss of which, trading shorts can be held on to.