11495 IS NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 11250

11495 IS NEXT UPSIDE TARGET; STAY LONG WITH THE STOP-LOSS OF 11250

WORLD MARKETS

US indices fell 0.1% each as new doubts emerged about the U.S.-China partial trade deal.

Media reports suggested that China wants to have additional trade talks before signing what President Donald Trump characterized Friday as a “very substantial phase one deal.” 

Treasury Secretary Steven Mnuchin, in a media interaction said while both sides made “substantial progress” last week, the agreement is still “subject to documentation.” He also said a December tariff hike on Chinese products would go through if a deal is not reached by then.

As part of phase one, China would buy between $40 billion and $50 billion in U.S. agricultural products. China also agreed to address intellectual-property concerns raised by the U.S. In return, the U.S. agreed to hold off on a tariff hike scheduled for this week.

Earlier, data showed that China’s import and export figures were worse than expected in September, with exports falling 3.2% on the year in U.S. dollar terms, while imports declined 8.5%.

Brent crude dropped $1.27, or 2.1%, to $59.24 a barrel, while WTI crude lost $1.11, or 2%, to settle at $53.59 a barrel.

European markets fell 0.3%-0.5%.

AT HOME

After gaining nearly a percent, Sensex and Nifty nosedived in last hour to end higher by just 0.2% and 0.3% respectively, nevertheless, extending the winning streak to second straight day. Sensex settled at 38214, up 87 points while Nifty added 36 points to finish at 11341. BSE mid-cap and small-cap indices gained 0.4% and 0.1% respectively.  BSE Telecom and Realty indices climbed 2.2% and 2% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.9% and 0.5% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 896 cr, 975 cr and 252 cr respectively. DIIs were net sellers to the tune of Rs 425 cr.

Rupee depreciated 21 paise to end at 71.23/$.

HUL reported better-than-expected earnings but management commentary remained cautious. Revenue rose 6.7% y-o-y to Rs 9852 cr, EBITDA jumped 21% to Rs 2443 cr, margin improved 290 bps to 24.8% and net profit rose 21.2% to Rs 1848 cr.

India's wholesale prices based inflation eased to 0.33% in September, as against 1.08% in August due to fall in prices of non-food articles. Retail inflation for September rose to 3.99%, it's highest in 14-months, from upwardly revised 3.28% in August.

OUTLOOK

Today morning, Nikkei is up 1.8%, Hang Seng is little changed while Shanghai is down 0.2%. SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had said that "11390, the 50% retracement level of the recent 11695-11090 fall, continues to be next upside target/hurdle to eye, upon crossover of which 11495, the 67% retracement level of this move, would be the next target".

Nifty, after achieving 11390 target, went all the way to 11420, but slipped from there to end at 11341 and is set to open higher today.

11495, the 67% retracement level of the 11695-11090 fall, continues to be next upside target/resistance to eye.

11250 is the immediate support on the hourly chart below which 11189, the low made on Friday, would be next support.

Meanwhile, trading longs can be held on to with the stop-loss of 11250.

Wipro will report its quarterly earnings today.