NIFTY REBOUNDS FROM THE SUPPORT; 16600 IS IMMEDIATE HURDLE

 

NIFTY REBOUNDS FROM THE SUPPORT; 16600 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices gained 0.6%-1.2% on Friday, building on Thursday’s rebound from lower levels.

 

US 10-year treasury yield rose 1 bps to 1.257%. Dollar index was little changed at 93.629. Spot gold was up 0.1% at $1,782.45 per ounce.

 

Oil extended the fall to seventh straight day. Brent crude fell $1.27, or 1.9%, to $65.18 a barrel while WTI slipped $1.37, or 2.2%, to $62.32 a barrel, hitting their lowest since April.

 

European markets rose 0.3%-0.4%. German producer prices rose at hither-than-expected 1.9% month-on-month in July. British retail sales dropped in July by 2.5% from the previous month.

 

China’s one-year loan prime rate (LPR) and five-year LPR were both left unchanged at 3.85% and 4.65%, respectively. Tougher scrutiny over technology continues in China with a new data protection law approved on Friday.

 

For the week, US equity indices fell 0.6%-1.1%, European markets slipped 1.1%-3.9% while Asian markets saw cuts ranging from 0.2%-5.3% with the Hang Seng leading the losses which is now down more than 20% lower from its mid-February high. Crude oil tumbled nearly 9% for its biggest weekly loss in more than nine months as the Delta variant drags on fuel demand while supply is steadily increasing. Dollar index surged 1% for its best week in two months and hit a 9-1/2 month high.

 

AT HOME

 

Sensex and Nifty slipped 0.5% and 0.7% respectively, hitting lowest level in a week. Sensex lost 300 points to settle at 55329 while Nifty finished at 16450, down 118 points. Nifty mid-cap and small-cap indices nosedived 2% and 2.2% respectively to hit their lowest in more than a month and half. Except 2.2% higher FMCG index, all the BSE sectoral indices ended in red, with Metal index being the top loser, down 6.9%, followed by 3.9% lower Basic Materials index.

 

FIIs net sold stocks and index futures worth Rs 2287 cr and 913 cr respectively but net bought stock futures worth Rs 544 cr. DIIs were net buyers to the tune of Rs 119 cr.

 

Rupee depreciated 15 paise to end at 74.39/$.

 

For the week, Sensex and Nifty eased 0.2% and 0.5% respectively, snapping two-week winning streak. Nifty mid-cap and small-cap indices tumbled 1.7% and 3.4% respectively, extending the losing streak to second and third straight week respectively.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are 1.7% each while Shanghai is up 0.7%. SGX Nifty is suggesting around 140 points higher start for our market.

 

In Friday's report we had said that 16700 continued to be immediate hurdle, a crossover of which was required for a fresh upmove. We had also said that 16350-16375, the erstwhile resistance zone, would be the immediate support zone to eye.

 

Nifty, after touching a low of 16376, closed at 16450, and is set to open above 16550 today.

 

16600 is the immediate hurdle on the hourly chart, upon crossover of which, 16701, the top made last week, would be the next upside level to eye.

 

16376, the low made Friday, is now the immediate support, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 35800 is the immediate resistance on the hourly chart, above which, 36300 would be the bigger hurdle to eye; 34926, the low made on Friday, is the immediate support.