17300-17250 IS THE NEXT SUPPORT ZONE; 17623 IMMEDIATE HURDLE

 

17300-17250 IS THE NEXT SUPPORT ZONE; 17623 IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices nosedived 1.7%-2.2% on concerns including the imminent Federal Reserve meeting, liquidity crisis at China Evergrande Group, the lingering delta variant and the debt ceiling deadline. S & P 500 fell the most since May 12 while Dow had its biggest one-day drop since July 19.

 

Fed begins its two-day policy meeting today and markets are awaiting cues on central bank’s plans to taper its bond buying.

 

Hang Seng index plunged 4% as China’s second-largest property developer, Evergrande, is on the brink of default and fear is that the pain that could come from its collapse would extend beyond China. A deadline for an $83.5 million interest payment on one of its bonds is due today, and the company has $305 billion in liabilities.

 

Delta variant remains a global health threat as the colder months approach and vaccination hesitancy persists among some Americans. Markets are also concerned about the deadline to raise the debt ceiling and possible tax increase.

 

US 10-year treasury yield dropped 6 basis points to 1.311%. Dollar index rose 0.025%. Spot gold rose 0.5% to $1,762.66 per ounce.

 

Brent crude fell $1.42, or 1.9%, to $73.92 a barrel while while WTI declined $1.68 or 2.3% to $70.29.

 

European markets fell 0.9%-2.6%.

 

AT HOME

 

Sensex, Nifty nosedived 0.9% and 1.1% respectively, suffering the biggest fall in 2-months. Sensex settled at 58490, down 525 points while Nifty lost 188 points to finish at 17396. Nifty mid-cap and small-cap indices tumbled 2.2% and 1.7% respectively, with the former having worst day in more than 5 months. Except 0.7% higher FMCG index, all the BSE sectoral indices ended in red, with Metal index being the top loser, down 6.8%, followed by 4.1% lower Basic Materials index.

 

FIIs net bought stocks worth Rs 93 cr but net sold index futures and stock futures worth Rs 2560 cr and 653 cr respectively. DIIs were net sellers to the tune of Rs 1627 cr.

 

Rupee depreciated 26 paise to end at 73.73/$.

 

OUTLOOK

 

Markets in mainland China and South Korea are closed today for a holiday. Nikkei is down nearly 2% while Hang Seng is marginally higher. SGX Nifty is suggesting around 40 points higher start for our market.

 

In yesterday's report we had said that 17793, the top made Friday, was the immediate hurdle to eye while immediate support on the hourly chart was placed around 17450, upon breach of which, 17300-17250 would be the next support zone.

 

Nifty broke 17450 support and plunged all the way to 17362 before closing at 17396.

 

17300-17250 continues to be next support zone to eye.

 

17623, the top made yesterday, is the immediate hurdle, above which, 17793, the top made last week, would be the bigger resistance to eye.

 

36850 continues to be immediate support for Banknifty, below which, 36350-36150 would be the next support zone; 38113, the top made Friday, is the immediate hurdle.