NIFTY RETREATS AFTER ACHIEVING 15915 TARGET

 

NIFTY RETREATS AFTER ACHIEVING 15915 TARGET

 

WORLD MARKETS

 

Dow and S & P 500 fell 0.6% and 0.2% respectively, with the later snapping 7-day winning streak, while Nasdaq inched up 0.2%. Recovery-centered stocks like Caterpillar, Chevron and JPMorgan Chase pulled back while Big Tech stocks like Amazon, Apple and Alphabet gained.

 

The ISM survey’s measure of service employment fell to a reading of 49.3 in June from 55.3 in May.

 

The 10-year and 30-year Treasury yield fell 7.2 bps and 6.4 bps respectively to 1.36% and 1.98% respectively, amid signs that the economic recovery from the pandemic could be slowing. However, the shorter end of the yield curve, including rates on 3-month bills and 2-year Treasury notes, were mostly flat on expectation that the Fed will start removing some asset purchases as soon as this year.

 

The dollar index rose 0.328% to 92.550. Spot gold rose 0.2% to $1,794.37 per ounce.

 

WTI crude after, touching a high fo $76.98 retreated to end 2.4% or $1.79, at $73.37 per barrel. Brent finished $2.63, or 3.4%, lower at $74.53 barrel.

 

European markets fell 0.9% each. German industrial orders unexpectedly slumped in May, dropping 3.7% on the month to mark their sharpest decline since the first Covid lockdown of 2020. Germany's ZEW economic sentiment index also hit its lowest since January, falling to 63.3 in July from 79.8 in June and coming in well short of a consensus forecast of 75.2. However, Eurozne retail sales increased 4.6% month-on-month, outstripping a forecast of 4.4%.

 

AT HOME

After gaining half a percent, benchmark indices plunged in late noon trade to end marginally in the red, snapping 2-day winning streak. Sensex settled at 52861, down 19 points while Nifty lost 16 points to finish at 15818. Nifty mid-cap and small-cap indices fell 0.1% and 0.7% respectively. BSE Auto and IT indices tumbled 1.8% and 1.2% respectively, becoming top losers among the sectoral indices while Bankex and Finance indices were the top gainers, up 1% and 0.8% respectively.

 

FIIs net sold stocks worth Rs 543 cr but net bought index futures and stock futures worth Rs 224 cr and 1059 cr respectively. DIIs were net buyers to the tune of Rs 521 cr.

 

Rupee depreciated 24 paise to end at 74.54/$.

 

Tata Motors plunged after its UK subsidiary Jaguar Land Rover said it expects an operating cash outflow of about £1 billion, with negative EBIT margin in the Q2FY21, due to the supply constraints.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.3%-1.1% and SGX Nifty is suggesting around 50 points lower start for our market.

 

In yesterday's report we had said that 15915, the top made last week, was the next upside level to eye.

 

Nifty, after touching a high of 15914, reversed to end at 15818 and is set to open below 15800 today.

 

15762-15738, the gap created by Monday's gap-up opening, continues to be immediate support zone. Below 15738, 15636, the low made last week, would be the next downside level to eye.

 

15915 continues to be upside level to eye, a crossover of which is required for a fresh upmove. If that happens, 16200 would be the next target to eye.

 

Meanwhile, trading longs can be held on to with the stop-loss of 15738.