STAY LONG WITH THE STOP-LOSS OF 16565

 

STAY LONG WITH THE STOP-LOSS OF 16565

 

WORLD MARKETS

 

US indices gained 0.7%-1.2% on Friday, with the S&P 500 and the Nasdaq Composite closing at all-time highs on after Fed Chair Jerome Powell signaled the central bank would begin cutting its asset purchases later this year but rate hikes were still far off.

 

Powell said inflation is solidly around the central bank’s 2% target rate, one of the goals of the Fed’s dual mandate; however, he also explained why he continues to think the current inflation rise is transitory and will eventually drop to the target level. He also said the central bank has “much ground to cover” to reach its other goal of maximum employment.

 

The Personal Consumption Expenditures index rose 4.2% y-o-y in July and 0.4% from the previous month. The University of Michigan’s final consumer sentiment data for August came in at 70.3, reinforcing a dramatic decline seen in the preliminary reading two weeks earlier.

 

US 10-year treasury yield lost 3.9 bps to reach 1.305%. Dollar index fell 0.42% to 92.6540. Spot gold rose 1.4% to $1,817.21 per ounce

 

Brent futures rose $1.63, or 2.3%, to $72.70 a barrel, while WTI crude rose $1.32, or 2.0%, to settle at $68.74.

 

European markets rose 0.2%-0.6%. French consumer confidence index slipped to 99 from 100 in July.

 

For the week, US indices gained 0.9%-2.8% with the Nasdaq on the top. Brent gained over 11% and WTI rose more than 10%, which were the biggest weekly percentage gains for both since June 2020.

 

AT HOME

 

After dipping around 0.4% in the initial trade, benchmark indices surged nearly eight tenth of a percent to end higher by about four tenth of a percent, hitting fresh record highs. Sensex added 176 points to settle at 56125 while Nifty finished at 16705, up 68 points. Nifty mid-cap and small-cap indices surged 1.1% and 0.8% respectively. All the BSE sectoral indices ended in green with Capital Goods and Basic Material indices leading the tally, up 2.1% and 1.7% respectively.

 

FIIs net sold stocks worth Rs 779 cr but net bought index futures and stock futures wroth Rs 415 cr and 1917 cr respectively. DIIs were net buyers to the tune of Rs 1646 cr.

 

Rupee appreciated 53 paise to end at 73.68/$.

 

For the week, Sensex and Nifty gained 1.4% and 1.6% respectively. Nifty mid-cap index rose 2.1%, snapping 2-week losing streak. Small-cap index added 1.9%, registering first positive week in four.

 

OUTLOOK

 

Today morning, Shanghai and Nikkei are trading with modest gains while Hang Seng is marginally in the red. SGX Nifty is suggesting around 70 points higher start for our market.

 

In Friday's report we had said that 16800 continued to be next upside level to eye and had asked holding on to long positions with the stop-loss of 16540.

 

Nifty, after touching a low of 16565, rebounded to end at 16705 and is set to open above 16750 today.

 

16850 is the next upside target, above which, 17000 would be the next upside level to eye.

 

16565, the low made Friday, would now work as the immediate support, with the stop-loss of which, trading longs can be held on to.

 

36300 is the upside hurdle for Banknifty; 35350 is the immediate support.