11111 IS THE IMMEDIATE SUPPORT; 11373 IMPORTANT HURDLE

 

11111 IS THE IMMEDIATE SUPPORT; 11373 IMPORTANT HURDLE

 

WORLD MARKETS

 

Dow gained 0.1%, S & P 500 ended flat while Nasdaq fell 0.2% on Friday, digesting mixed economic data and awaiting fresh clues on further coronavirus stimulus.

 

Retail sales for July rose 1.2%, missing the estimate of 2.3%. Excluding autos, however, retail sales rose 1.9% to top a forecast of 1.2%.

 

Brent crude fell 10 cents to $44.86 per barrel, while WTI settled 23 cents lower at $43.01 per barrel.

 

European markets fell 0.7%-1.6%. Euro zone GDP contracted 12.1% in the second quarter, and experienced its worst fall in employment ever recorded. The bloc’s trade surplus surged to 21.2 billion euros ($25 billion) due to a sharp fall in imports.

 

For the week, Dow and S & P 500 gained 1.8% and 0.6% respectively while Nasdaq ended flat.

 

U.S. President Trump issued an executive order Friday forcing China’s ByteDance to sell or spin off its U.S. TikTok business within 90 days. Also, report over the weekend said that a planned U.S.-China trade deal review initially set for Saturday was delayed with no new date agreed upon.

 

AT HOME

 

Benchmark indices tumbled 1.1% each to close at 1-week low. Sensex settled at 37877, down 433 points while Nifty lost 122 points to finish at 11178. BSE mid-cap and small-cap indices fell 1% and 0.6% respectively. BSE Auto index and Bankex were the top losers among the sectoral indices, down 2.5% and 2.2% respectively. Metal and Healthcare indices were the top gainers, up 0.8% each.

 

FIIs net bought stocks and index futures worth Rs 46 cr and 413 cr respectively but net sold stock futures worth Rs 380 cr. DIIs were net sellers to the tune of Rs 797 cr.

 

Rupee depreciated 6 paise to end at 74.90/$.

 

For the week, Sensex and Nifty fell 0.4% and 0.3% respectively.

 

While addressing the nation on the Independence Day, PM Modi laid out his vision for India. Atmanirbhar Bharat, Infrastructure push, Border security and military advance anent, Acceleration of digital India initiative and National Digital Health Mission were some of the highlights of his speech.

 

OUTLOOK

 

Data today showed Japan’s economy shrank 27.8% on an annualized basis in April-June quarter, marking the sharpest contraction on record.

 

Today morning, Shanghai and Hang Seng are up 1.2% and 0.6% respectively while Nikkei is off 0.8%. SGX Nifty is suggesting around 80 points higher start for our market.

 

In Friday's report we had reiterated the view that 11390, the top made on 5th March, continued to be upside resistance while 11190 continued to be immediate support on the hourly chart, with the stop-loss of which, trading longs should be held on to.

 

Nifty broke 11190 support and plunged all the way to 11111 before closing at 11178 but is set to open near 11250 today.

 

11111, the low made on Friday, also coincided with the trendline adjoining recent bottoms on the daily chart and hence is the immediate support to eye. If 11111 breaks, 34-DMA, placed around 11000, would be the next important support.

 

11373, the top made last week, is the important resistance to eye.