17250-17200  CONTINUES TO BE SUPPORT ZONE; 17436 IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices fell 0.8%-0.9% on Friday, with the Dow and S&P 500 posting a fifth straight day of losses, while the Nasdaq Composite registered its third consecutive negative session.

 

The producer price index rose 8.3% y-o-y in August for its largest increase since at least 2010. Month-on-month it rose 0.7%, above the estimate of 0.6% but down from the 1% gain in July.

 

U.S. President Biden and Chinese leader Jinping spoke for the first time in seven months. The topic of discussion included economic issues, climate change and COVID-19.

 

US 10-year treasury yield rose 4 bps to 1.339%. The dollar index fell 0.1% to 92.459. Spot gold fell 0.2% to $1,790.37 an ounce.

 

Brent crude rose $1.47, or 2%, to $72.92 while WTI crude settled 2.3%, or $1.58, higher at $69.72 per barrel.

 

In Europe, FTSE inched up 0.1% while DAX and CAC fell 0.1% and 0.3% respectively.

 

For the week, Dow fell 2.2% in its second negative week in a row. The S&P 500 fell 1.7% while the Nasdaq Composite dipped 1.6%. Oil inched up nearly half a percent. Gold fell nearly 2% for its first weekly decline in five.

 

AT HOME

 

Consolidation continued as Nifty inched up 0.1%, marking the third consecutive session of movement of less than 0.1%. Sensex settled at 58305, up 55 points while Nifty gains 16 points to close at 17369. Nifty mid-cap and small-cap indices rose 0.3% and 0.6% respectively.BSE Telecom and Power gained 2.4% and 1.6% respectively, becoming top gainers among the sectoral indices while Realty and Consumer Durables lost 0.6% and 0.3% respectively, becoming the top losers.

 

FIIs net bought stocks worth Rs 423 cr but net sold index futures and stock futures worth Rs 1517 cr and 1275 cr respectively. DIIs were net buyers to the tune of Rs 704 cr.

 

Rupee appreciated 10 paise to end at 73.50/$.

 

For the week, Sensex and Nifty gained 0.3% each, extending the winning streak to third consecutive week.

 

Industrial output rose by 11.5% in July 2021 as against a 10.5% contraction in July 2020 but was lower than the 13.6% growth recorded in June.

 

OUTLOOK

 

Today morning, Hang Seng and Nikkei are down 1.6% and 0.3% respectively while Shanghai is up 0.1%. SGX Nifty is trading around 17360, suggesting a flattish start when compared to Thursday's close of Nifty futures.

 

In Thursday's report we had reiterated the view that 17250-17200 continued to be immediate support zone and 17436, the top made Tuesday, was the immediate hurdle.

 

Nifty ended little changed at 17369 after trading in a narrow range.

 

17436, the top made Tuesday, continues to be immediate hurdle, upon crossover of which, 17600-17650 would be the next target zone.

 

17250-17200 continues to be the support zone and trading longs can be held on to with the stop-loss of 17200.

 

36151, the low made last week, is the immediate support for Banknifty; 37140 is the immediate hurdle.