11247 CONTINUES TO BE IMMEDIATE SUPPORT; 11491 NEAREST HURDLE

11247 CONTINUES TO BE IMMEDIATE SUPPORT; 11491 NEAREST HURDLE

WORLD MARKETS

US indices gained 0.5%-1.1%, rebounding from steep, 2-day sell-off, amid increasing expectations that the Federal Reserve will cut rates later this month.

ISM’s reading on the U.S. services sector fell last month to its lowest level since August 2016.

Brent oil futures fell just 1 cent to $57.68 a barrel while WTI crude settled down 19 cents to $52.45.

In Europe, FTSE fell 0.6% while CAC and Italy rose 0.3% and 0.1% respectively. Markit September final composite PMI came in at 50.1, down from 51.9 in August, while services PMI slipped to 51.6 from 53.5 the previous month. German and French services PMI both missed expectations, coming in at 51.4 (versus 52.5 forecast) and 51.1 (versus 51.6 forecast) respectively. Figures out of Spain showed that its services sector grew at a slower pace in September, cooling from August’s five-month high to come in at 53.3, down from 54.3.

AT HOME

After falling nearly a percent in the initial trade, Sesnex and Nifty recouped nearly half of the losses through the session to end lower by 0.5% and 0.4% respectively, extending the losing streak to fourth straight day. Sensex settled at 38106, down 198 points while Nifty lost 46 points to finish at 11314. BSE mid-cap and small-cap indices fell 0.3% and 0.4% respectively. BSE Metal and Basic Material indices tumbled 3% and 1.8% respectively, becoming top losers among the sectoral indices while Oil & Gas and Realty indices were the top gainers, up 1.8% and 1.1% respectively.

FIIs net sold stocks and index futures worth Rs 811 cr and 1063 cr respectively but net bought stock futures worth Rs 97 cr. DIIs were net buyers to the tune of Rs 863 cr.

Rupee appreciated 20 paise to end at 70.88/$.

Yes Bank soared after lender sold all the shares pledged by promoters on Tuesday, removing the promoter share sale overhang.

OUTLOOK

Shanghai continues to remain shut while Nikkei is down 0.2% and Hang Seng is up 0.2% in today's trade. SGX Nifty is suggesting 15-20 points higher start for our market.

Readers would recall that below 11381, we had given downside target of 11250 for Nifty, where 200-DMA was placed. Nifty achieved this target on Tuesday by touching a low of 11248 before closing at 11360. Yesterday, it retested this bottom by touching a low of 11257 before closing at 11314.

11248, the bottom made on Tuesday, continues to be important immediate support to eye. If that breaks, 34-DMA, placed around 11080, would be the next support.

11491 continues to be immediate resistance on the hourly chart, upon crossover of which 11695, the top made last week, would be the bigger hurdle to eye.

RBI's monetary policy committee is widely expected to cut rate for the 5th time in a row when it wraps up its meeting today. The magnitude of rate cut may vary from 25 bps to 40 bps. It is also expected to cut its GDP growth forecast, bringing it closer to six percent mark.