STAY LONG WITH THE STOP-LOSS OF 17610

 

STAY LONG WITH THE STOP-LOSS OF 17610

 

WORLD MARKETS

 

Dow rose 0.2% while S & P 500 and Nasdaq fell 0.3% and 0.5% respectively as a rise in bond yields weighed on growth pockets in the market.

 

Fueled by economic optimism and inflation fears, US 10-year treasury yield briefly topped 1.5%, its highest level since June, before paring back some of the gains to settle 2.8 bps higher at 1.489%. Dollar index rose 0.1% to 93.37. Spot gold was down 0.1% at $1,748.86 per ounce.

 

August durable goods orders rose 1.8%, well above expectations thanks to a big jump in the transport sector. July reading was also revised higher.

 

Meanwhile, Lawmakers must pass a new budget by the end of September to avoid a shutdown, and also figure out a way to increase or suspend the debt ceiling in October before the U.S. would default on its debt for the first time. Markets are also keeping an eye on Thursday's House vote on the $1 trillion bipartisan infrastructure bill already approved by the Senate.

 

Meanwhile, in prepared remarks set to be delivered today, Fed Chair Powell said that inflation could persist longer-than-expected.

 

Brent crude climbed 1.84%, or $1.44, to settle at $79.53 per barrel, while U.S. Oil settled $1.47, or 2%, higher at $75.45 per barrel.

 

Main European markets gained 0.2%-0.3%. ECB President Christine Lagarde said in remarks to a European Parliament committee that euro zone inflation could exceed the bank’s projections but price increases would likely be temporary. Poor showing for Germany’s far-left Die Linke party, meant that a fully left-leaning coalition was now out of the question.

 

AT HOME

 

After rising half a percent at the open, benchmark indices gave away all the gains through the session to end little changed. Sensex settled at 60077, up 29 points while Nifty added 2 points to finish at 17855. Nifty mid-cap index was flat while small-cap index eased 0.1%. BSE Auto and Realty indices soared 3.1% and 2.9% respectively, becoming top gainers among the sectoral indices while IT and Teck indices tumbled 2.3% and 2% respectively, becoming the top losers.

 

FIIs net sold stocks and stock futures worth Rs 595 cr and 318 cr respectively but net bought index futures worth Rs 572 cr. DIIs were net buyers to the tune of Rs 1398 cr.

 

Rupee depreciated 15 paise to end at 73.84/$.

 

OUTLOOK

 

Today morning, Hang Seng and Shanghai are up 1% and 0.2% respectively while Nikkei is of 0.7%. SGX Nifty is suggesting around 25 points higher start for our market.

 

In yesterday's report we had said that 18050-18100 was the next target zone to eye and had advised holding on to long positions with the stop-loss of 17610.

 

Nifty, after touching a high of 17943 in the initial trade, slipped to end at 17855.

 

Upon crossover of 17950, around which Nifty is finding resistance for last two sessions, 18100, where a rising trendline adjoining recent tops is placed, would be the next upside target to eye.

 

17646-17610, the gap created by last Wednesday’s gap-up opening, continues to be immediate support area, and trading longs can be held on to with the stop-loss of 17610.

 

39000, followed by 39700, are the upside levels to eye for Banknifty. 37400 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.