11535 IS THE SUPPORT; 11770 IS IMMEDIATE HURDLE

 

11535 IS THE SUPPORT; 11770 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

Dow and S & P 500 fell 0.6% and 1.2% respectively while Nasdaq nosedived 2.4% on Friday as big tech shares fell following release of quarterly and election uncertainty and rising covid cases weighed on the sentiment.

 

Apple fell 5.6% after reporting a 20% decline in iPhone sales and failing to offer any guidance for the quarter ahead. Amazon dropped 5.5% even after reporting blowout third-quarter results with a big beat on the top line. Twitter plunged more than 21% after reporting user growth that fell short of expectations. Facebook was off by 6.3% amid a surprise decline in active users in Canada and the U.S. Alphabet however rose 3.8% after posting quarterly results that topped estimates.

 

Senate Majority Leader Mitch McConnell adjourned the Senate until Nov. 9, making it highly unlikely for Democrats and Republicans to reach a deal on new fiscal stimulus before the election on Tuesday. Treasury Secretary Steven Mnuchin, meanwhile, accused House Speaker Nancy Pelosi of miscasting the state of the stalled negotiations, calling it a “political stunt.”

 

Brent crude slipped for a third day and settled 19 cents, or 0.5%, lower at $37.46 per barrel. WTI crude settled 38 cents, or 1.1%, lower at a five month low of $35.79 per barrel.

 

In Europe, FTSE and DAX fell 0.1% and 0.4% respectively while CAC rose 0.5%. Euro zone GDP jumped by 12.7% in the third quarter. Eurozone October inflation came in at -0.3%, unchanged from the previous month.

 

For the week, US indices nosedived 5.5%-6.5%, posting their biggest weekly losses since March. They also posted their first back-to-back monthly losses since March. The Dow lost more than 6% this month while the S&P 500 and Nasdaq each declined by more than 5% in October.

 

US reported a record 99,321 new Covid-19 cases on Friday. U.K. Prime Minister announced Saturday that England will adopt a second national four week lockdown starting Thursday following a surge in virus cases. Data on Saturday showed China's official manufacturing PMI fell to 51.4 in October from 51.5 in the preceding month. Data today showed Caixin/HIS Markit manufacturing PMI rose to 53.6 from 53.

 

AT HOME

 

Sensex and Nifty ended lower by 0.3% and 0.2% respectively after a roller coaster session, extending the losing streak to third straight day. Sensex settled at 39614, down 135 points while Nifty lost 28 points to finish at 11642. BSE mid-cap index gained 0.6% while small-cap index closed flat. BSE Telecom index tumbled 2.4%, becoming top loser among the sectoral indices, followed by 1.2% lower Auto index. Realty index was the top gainer, up 2.2%, followed by 1.5% higher Metal and Energy indices.

 

FIIs net sold stocks and index futures worth Rs 871 cr and 966 cr respectively but net bought stock futures worth Rs 759 cr. DIIs were net buyers to the tune of Rs 631 cr.

 

For the week, Sensex and Nifty fell 2.6% and 2.4% respectively. For the month, Sensex and Nifty rose 4% and 3.5% respectively.

 

Maruti and Hero MotoCorp registered record sales in October while Escorts posted highest October sales. Maruti sales rose 18.9% to 1.82 lk units. Hero Motocorp sales surged 35% to 8.06 lk units. Escorts sales rose 2.3% to 13664 units. Eicher Motor's Royal Enfield sales fell 7% to 66891 units while VECV sales rose 11.9% to 4200 units.

 

GST collections in October stood at over ₹1.05 lakh crore, crossing for the first time ₹1 lakh crore mark since February this year.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are up 1.5% and 0.8% respectively while Shanghai is marginally higher. SGX Nifty is suggesting a marginally higher start for our market.

 

In Friday's report we had said that 11590, where 34-DMA was placed, continues to be important immediate support. Nifty broke this level to touch a low of 11535, but rebounded from there to end at 11642, holding on to 34-DMA support on closing basis.

 

11535, the weekly low made on Friday, also coincides with the 50-Day Moving Average, 38.2% retracement level of the entire 10790-12025 upmove as well as the lower band of bollinger on the daily chart. This makes 11535 an important support to eye. If this level breaks, 11407 the 50% retracement levels of the 10790-12025 upmove, would be the next supports.

 

On the way up, 11770 is the immediate hurdle on the hourly chart, upon crossover of which, 11942, the top made during the week, would be the next hurdle.