16500 ABOVE 16350; 16176-16146 IS THE IMMEDIATE SUPPORT ZONE

 

16500 ABOVE 16350; 16176-16146 IS THE IMMEDIATE SUPPORT ZONE

 

WORLD MARKETS

 

Dow and S & P 500 gained 0.4% and 0.2% respectively to close at record highs as stocks tied to the economic recovery rose after a stronger-than-expected jobs data.  Nasdaq however fell 0.4% as tech shares declined following jump in interest rate.

 

U.S. economy added 943,000 jobs in July, the expected figure being 845,000. The unemployment rate dropped to 5.4%, below the estimate of 5.7%. Average hourly earnings also increased more than expected, rising 0.4% for the month.

 

US 10-year treasury yield jumped 8 bps to 1.304%. Dollar index jumped 0.6% to 92.776. Spot gold plunged 2.2% to $1,763.96 per ounce, its lowest in over a month.

 

Brent futures settled down 59 cents, or 0.8%, at $70.70, while WTI crude futures fell 81, or 1.2%, to $68.28 a barrel.

 

In Europe, FTSE ended flat while DAX and CAC gained 0.1% and 0.5% respectively. German industrial output fell unexpectedly by 1.3% in June, its second consecutive monthly decline.

 

For the week, US indices gained 0.7%-1.1%.

 

Brent shed more than 6%, its largest week of losses in four months, and WTI tumbled nearly 7% in its biggest weekly decline in nine months on worries that travel restrictions to curb the spread of the Delta variant of COVID-19 will derail the global recovery in energy demand. Strong dollar also weighed on prices.

 

AT HOME

 

Benchmark indices slipped 0.4% each, snapping 4-day winning streak. Sensex settled at 54277, down 215 points while Nifty lost 56 points to finish at 16238. Nifty mid-cap and small-cap indices managed to end marginally higher. BSE Energy and Realty indices were the top losers among the sectoral indices, down 1.4% and 1% respectively whereas Telecom and Utilities indices were the top gainers, up 1.4% and 1.1% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 69 cr, 589 cr and 828 cr respectively. DIIs were net sellers to the tune of Rs 631 cr.

 

Rupee ended flat at 74.16/$.

 

For the week, Sensex and Nifty climbed 3.2% and 3% respectively, registering biggest weekly gain in 2-1/2 months.

 

Monetary Policy Committee voted unanimously to keep repo rate unchanged and also decided on a 5 to 1 majority to continue with the accommodative stance. The RBI retained FY22 GDP growth forecast at 9.5% and sees FY23 GDP growth at 17.2%. The inflation forecast for FY22 has been hiked to 5.7% from 5.1% earlier.

 

OUTLOOK

 

Today morning, Nikkei is closed while Hang Seng and Shanghai are marginally in the red. SGX Nifty is suggesting around 40 points lower start for our market.

 

Readers would recall that we had given target range of 16300-16400 after 15962 resistances was taken out.

 

Nifty last week touched a high of 16349, achieving this target zone and vindicating our view.

 

16349, the top made during the week, is the immediate hurdle, upon crossover of which, 16475-16500 would be the next target zone.

 

16176-16146, the gap created by Wednesday’s gap-up opening, is the immediate support zone.

 

For Banknifty, 36500 followed by 37200 are next upside targets to eye. 35313-35238, the gap created by Wednesday's gap-up opening, is the immediate support zone.