STAY LONG WITH THE STOP-LOSS OF 11056

STAY LONG WITH THE STOP-LOSS OF 11056

WORLD MARKETS

US indices fell 0.6%-0.9% on Friday as tech shares eased and U.S.-China tensions rose.

Intel plunged more than 16% after offering disappointing guidance for the third quarter and delaying the release of its next-generation chips. Shares of Facebook, Alphabet, Apple and Microsoft all traded lower. Tesla dropped more than 6%.

China ordered the closure of a U.S. consulate in Chengdu, retaliating after Washington shut the Chinese consulate in Houston earlier this week, which it accused of being a hotspot for espionage and intellectual property theft. Shanghai Composite plunged 3.9% on Friday.

Brent crude futures settled 3 cents higher at $43.34 per barrel while WTI crude futures gained 22 cents to settle at $41.29 a barrel.

Gold surged to a record closing high, settling 0.4% higher at $1,897.50 per ounce.

European markets plunged 1.4%-2%. Eurozone flash Markit PMI for July came in at 54.8, indicating that economic activity grew for the first time since February. U.K. retail sales also came in much better than expected.

For the week, Dow and S & P 500 fell 0.7% and 0.2% respectively, snapping three-week winning streak. Nasdaq lost 1.3% for its first back-to-back weekly losses since May.

AT HOME

After falling more than a percent, Benchmark indices recouped most of the losses in late noon surge to end marginally lower. Sensex settled at 38128, down 11 points while Nifty lost 21 points to finish at 11194. BSE mid-cap and small-cap indices fell 0.6% and 0.2% respectively. BSE Metal index slipped 2.1%, becoming top loser among the sectoral indices, followed by 1.9% lower Bankex and Realty indices. Energy index climbed 2.9%, becoming top gainer, followed by 1.3% higher IT index.

FIIs net bought stocks worth Rs 410 cr but net sold index futures and stock futures worth Rs 1196 cr and 1210 cr respectively. DIIs were net sellers to the tune of Rs 1003 cr.

Rupee depreciated 7 paise to end at 74.83/$.

For the week, Sensex and Nifty gained 3% and 2.7% respectively, extending the winning streak to sixth consecutive week and closing at the highest level since the week ended 28th February, 2020.

ICICI Bank reported mixed earnings while asset quality improved. Gross NPA ratio, at 5.46%, was lowest in 18 quarters. Slippages at Rs 1160 cr, were lowest in 20 quarters.

ITC reported weak but better-than-expected earnings. Cigarette volumes fell 35-40%. Hotel revenue fell 94%.

ZEE reported 15% drop in ad revenue while subscription revenue grew 41%.

Asian Paints quarterly numbers were weak but much better than market estimates. Revenue fell 42.7% to Rs 2923 cr, EBITDA was down 58.2% at Rs 484 cr, margin contracted 610 bps to 16.6% and net profit fell 67% to Rs 220 cr.  

OUTLOOK

U.S. Treasury Secretary Steven Mnuchin yesterday said that Republicans have finalized a bill worth about $1 trillion in coronavirus relief funds.

Today morning, Hang Seng and Shanghai are up 0.8% and 0.5% respectively while Nikkei is off half a percent. SGX Nifty is suggesting around 30 points higher start for our market.

In Friday's report we had said that 11244, the upper end of the gap created by gap-down opening on 6th March, continued to be immediate hurdle and had advised trailing stop-loss in long positions to 11056.

Nifty, after touching a low of 11090, rebounded to end at 11194 and is set to open above 11200 today.

11244, the upper end of the gap created by gap-down opening on 6th March, continues to be immediate hurdle. Above 11244, 11390, the top made on 5th March, would be the next target/hurdle.

11056, the bottom made on Wednesday, continues to be immediate support, with the stop-loss of which, trading longs should be held on to.

Kotak Mahindra Bank, Tech Mahindra and Bharti Infratel will report their quarterly earnings today.