10820 IS NEXT SUPPORT; 11084 IMMEDIATE HURDLE

10820 IS NEXT SUPPORT; 11084 IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 0.7%-1.5%, with the Nasdaq closing at a record high, on the back of strength in technology stocks and positive economic data. The report that Eli Lilly started a late-stage trial for its coronavirus antibody treatment also aided the sentiment.

The Institute for Supply Management’s manufacturing PMI rose to 54.2 in July, it's highest level in nearly 1-1/2 years and topping estimate of 53.8.

Meanwhile, negotiations continued over a new stimulus package. House Speaker Nancy Pelosi said she, Senate Minority Leader Chuck Schumer and White House chief of staff Mark Meadows held “productive” discussions on Monday, but added there are several issues still outstanding.

Brent crude rose 86 cents, or 2%, to $44.38 a barrel, while WTI crude settled 74 cents, or 1.8%, higher at $41.01 per barrel.

European markets climbed 1.4%-2.7%. Eurozone July final IHS Markit manufacturing PMI came in at 55.3, outstripping expectations and rising from 48.9 in June.

Earlier, a private survey showed China’s manufacturing activity expanded more than expected in July.

AT HOME

Sensex and Nifty nosedived 1.8% and 1.6% respectively, extending the losing streak to fourth straight day and closing at the lowest level since 16th July. Sensex settled at 36939, down 667 points while Nifty lost 173 points to finish at 10899. Broader indices however outperformed with BSE small-cap index rising 1% and mid-cap index falling just 0.3%.  BSE Bankex and Finance indices tumbled 2.8% and 2.4% respectively, becoming top losers among the sectoral indices while Consumer Durables and Healthcare indices gained the most, up 1.1% and 0.6% respectively.

FIIs net bought stocks worth Rs 7818 cr (which included Rs 10482 cr on account of Bandhan Bank block deal) and net sold index futures and stock futures worth Rs 2615 cr and 1567 cr respectively. DIIs were net sellers to the tune of Rs 135 cr. 

Rupee depreciated 20 paise to end at 75.01/$.

Shares of Tata Motors soared 6.9% after the company reported better-than-expected quarterly earnings.

OUTLOOK

Today morning, Nikkei and Hang Seng are up 1.4% and 0.5% respectively while Shanghai is little changed. SGX Nifty is suggesting around 40 points higher start for our market.

Readers would recall that we had turned our view on Nifty bearish after 11084 support was broken and had given downside targets of 10952 followed by 10820.

Nifty yesterday plunged to 10882 before closing at 10891, achieving 10952 and moving towards 10820.

10820, the 67% retracement level of the 10562-11341 upmove, continues to be next downside target/support.

11084, the erstwhile support, would now act as immediate hurdle, with the stop-loss of which, trading shorts should be held on to.