GAP-DOWN OPENING AWAITS ON NEGATIVE US CUES; 11325 IS THE SUPPORT TO EYE

 

GAP-DOWN OPENING AWAITS ON NEGATIVE US CUES; 11325 IS THE SUPPORT TO EYE

 

WORLD MARKETS

 

US indices nosedived 2.8%-5%, with Nasdaq leading the losses, as big tech names saw severe profit booking.

 

Tech index fell 5.8%, suffering its worst day since March. Apple contributed a big portion of those losses, falling 8%. Facebook, Amazon, Netflix, Alphabet and Microsoft also closed sharply lower.

 

New filings for unemployment benefits totaled 881,000 for the week ending Aug. 29, beating the 950,000 estimate. The final reading for the U.S. Services PMI for August was 55.0, sharply up from the 50.0 level registered in July, and slightly above the flash figure of 54.8.

 

Brent crude fell 30 cents or 0.7%, to $44.13 a barrel while WTI crude futures settled 14 cents, or 0.34%, lower at $41.37 per barrel.

 

European markets fell 0.4%-1.5%. Final euro area Markit composite PMI came in at 51.9 against a forecast of 51.6, but was lower than the 54.9 reading for July. Germany’s services PMI for August was revised sharply higher to 52.5 from a preliminary estimate of 50.8.

 

Earlier, China's Caixin/Markit services PMI came in at 54.0, as compared to July’s reading of 54.1.

 

AT HOME

 

Benchmark indices ended marginally lower after a rangebound but choppy session, snapping 2-day winning streak. Sensex settled at 38990, down 95 points while Nifty lost 7 points to finish at 11527. BSE mid-cap and small-cap indices however gained 0.4% and 0.7% respectively, extending the winning streak to third straight day.  BSE Consumer Durable index soared 3.4%, becoming top gainer among the sectoral indices, followed by 1.5% higher IT index. Bankex was the top loser, down 1.5%, followed by 0.9% Finance and Metal indices.

 

FIIs net bought stocks worth Rs 8 cr but net sold index futures and stock futures worth Rs 772 cr and 1176 cr respectively. DIIs were net buyers to the tune of Rs 120 cr.

 

Rupee depreciated 44 paise to end at 73.47/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 1%-1.8% and SGX Nifty is suggesting around 100 points lower start for our market.

 

In yesterday's report we had said that 11560, the 50% retracement level of Monday’s 11794-11325 fall, which also coincided with the tops made on Tuesday and Wednesday, was the immediate hurdle to eye, upon crossover of which, 11640, the 67% retracement level of the aforementioned fall, would be the next target/resistance.

We had also said that 11325, the low made Monday, continues to be immediate support.

 

Nifty, after touching a high of 11584 in the initial trade, slipped to end at 11527 ans is set to open below 11450 today.

 

11325, the bottom made on Monday, continues to be important immediate support.

 

11640, the 67% retracement level of Monday’s 11794-11325 fall, is the resistance to eye.