10952 BELOW 11084; 11300 IS IMMEDIATE HURDLE

10952 BELOW 11084; 11300 IS IMMEDIATE HURDLE

WORLD MARKETS

After opening with cuts of nearly 2% on the back of historic GDP decline, Dow and S & P 500 recovered through the session to end lower by 0.8% and 0.4% respectively. Nasdaq ended higher by 0.4% ahead of earnings from big tech companies.

U.S. GDP contracted 32.9% in the second quarter — the worst drop ever. The expected decline was 34.7%. Weekly jobless claims came in at 1.434 million, roughly in line with estimates. However, continuing claims, or those who have been collecting for at least two weeks, totaled 17.018 million, up from about 16 million last week.

After the bell, big tech companies reported strong set of earnings. Apple reported a blowout quarter, with overall sales expanding by 11%. Apple also announced a 4-for-1 stock split. Amazon, meanwhile, traded 5.3% higher as the company saw its sales skyrocket during the coronavirus pandemic. Facebook shares rallied more than 7%  the social media giant posted revenue growth of 11%. The company also issued stronger-than-expected sales guidance for the current quarter.

WTI futures settled $1.35, or 3.3%, lower at 39.92. Brent crude futures, which expire today, settled 81 cents lower at $42.94 per barrel.

European markets plunged 2.1%-3.4%.

AT HOME

After rising nearly a percent in the morning, benchmark indices nosedived just under 2% in the noon session to end with cuts of nearly a percent, extending the losing streak to second consecutive day. Sensex settled at 37736, down 335 points while Nifty lost 100 points to finish at 11102. BSE mid-cap and small-cap indices fell 0.4% each. BSE Telecom and Oil & Gas indices tumbled 2.2% each, becoming top losers among the sectoral indices while Healthcare index climbed 2%, becoming top gainer, followed by 0.6% higher IT index.

FIIs net bought stocks, index futures and stock futures worth Rs 207 cr, 539 cr and 395 cr respectively. DIIs were net sellers to the tune of Rs 387 cr.

Rupee depreciated 4 paise to end at 74.84/$.

Reliance earnings were a mixed bag. Jio beat estimates while refining, petchem and retail disappointed.

OUTLOOK

China's July manufacturing PMI has come in at 51.1, up from 50.9 in June and better than the expected 50.7 figure.

Today morning, Hang Seng and Shanghai are up 0.7% each while Nikkei is down. SGX Nifty is suggesting around 40 points higher start for our market.

In yesterday's report we had reiterated the view that 11390, the top made on 5th March, continued to be upside target/hurdle and that trading longs could be held on to with the stop-loss of 11115.

Nifty, after touching a high of 11300 in the morning, plunged to 11085 before closing at 11102 and is set to open near 11150 today.

11084, the low made yesterday, also coincided with the 33% retracement level of the recent 10562-11341 upmove. Once 11084 is breached, 10952 and 10820, the 50% and 67% retracement levels of the 10562-11341 upmove, would be next downside targets.

11300, the top made yesterday, would now act as immediate hurdle.

SBI, Sun Pharma, IOC, UPL and Tata Motors will report their quarterly earnings today.