NIFTY SET TO PLUNGE AFTER ACHIEVING 16700 TARGET

 

NIFTY SET TO PLUNGE AFTER ACHIEVING 16700 TARGET

 

WORLD MARKETS

 

Dow and S & P 500 plunged 1.1% each while Nasdaq slipped 0.9% on Wednesday as the minutes from the July Fed meeting showed the central bank has started eyeing tapering its $120 billion in monthly bond purchases before the year-end.

 

Yesterday, after falling nearly a percent in the initial trade, Dow rebounded to end 0.2% lower while S & P 500 and Nasdaq managed to end higher by 0.1%.

 

Weekly jobless claims came in at 348,000, below the 365,000 expected and set a new pandemic-era low. However, the Philly Fed manufacturing index came in worse than estimates.

 

US 10-year treasury yield fell 3 basis points to 1.243%. Dollar index, after hitting a 9-month peak of 93.587, settled 0.3% higher at 93.587. Spot gold fell 0.5% to $1,778.65 per ounce.

 

Oil dropped for a sixth-straight session to hit lowest level since May. WTI slid 2.7% to settle at $63.69, and Brent declined 2.6% to $66.45 per barrel.

 

European markets slid 1.2%-2.6%.

 

AT HOME

 

After rising half a percent in the initial trade, benchmark indices nosedived eight tenth of a percent to end lower by three tenth of a percent. Sensex settled at 55629, down 163 points while Nifty lost 46 points to finish at 16568. Nifty mid-cap index rose 0.3% but the small-cap index fell 0.3%, extending the losing streak to fourth straight day. BSE Bankex and Metal indices tumbled 1% each, becoming top losers among the sectoral indices while Energy index was the top gainer, up 0.3%, followed by 0.24% higher FMCG and Oil & Gas indices.

 

FIIs net sold stocks and index futures worth Rs 595 cr and 41 cr respectively but net bought stock futures worth Rs 1002 cr. DIIs were net sellers to the tune of Rs 729 cr.

 

Rupee appreciated 11 paise to end at 74.24/$.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.7%-1.1% and SGX Nifty is trading around 16350, suggesting around 220 points lower start when compared to Wednesday's close of Nifty future.

 

In Wednesday's report we had said that 16700 was the next upside target and had advised trailing the stop-loss to 16440.

 

Nifty, after touching a high of 16701, reversed to touch a low of 16535 before closing at 16568. The benchmark is set to open below 16400 today.

 

16700 continues to be immediate hurdle, a crossover of which is required for a fresh upmove.

 

After the big gap-down opening as suggested by SGX Nifty, 16350-16375, the erstwhile resistance zone, would be the immediate support zone to eye. Below 16350, 16162, the low made last week, would be the next important support.

 

Meanwhile, the low made in the first hour should be used as the stop-loss for trading longs.

 

36300 continues to be immediate hurdle for Banknifty; 35370, 34600 are supports.