17781 IS THE IMMEDIATE HURDLE; 17326 NEXT SUPPORT

 

17781 IS THE IMMEDIATE HURDLE; 17326 NEXT SUPPORT

 

WORLD MARKETS

 

US indices climbed 0.8%-1.4% on Friday on news of a new oral treatment for Covid-19, which boosted stocks tied to the economic reopening.

 

Merck and Ridgeback Biotherapeutics said they’ve developed a drug that reduces the risk of hospitalization or death by around 50% for patients with mild or moderate cases of Covid.

 

The core personal consumption expenditures price index, the Federal Reserve’s preferred policy-guiding metric, was up 3.5% annually in August, slightly ahead of estimates. Personal income rose 0.2% in August, in line with expectations. ISM said its index of national factory activity increased to a reading of 61.1 last month from 59.9 in August.

 

US 10-year treasury yield fell 6 bps to 1.467%. Dollar index slid 0.3% to 94.046. Spot gold was up 0.1% at $1,759.13 per ounce.

 

Brent crude rose 1% to $79.13 per barrel, while WTI advanced 0.9% to $75.71 per barrel.

 

In Europe, FTSE and DAX fell 0.8% and 0.7% respectively while CAC was little changed. Euro zone inflation in September rose 3.4% y-o-y, the highest reading since September 2008 and up from 3% in August. German retail sales climbed 1.1% month-on-month in August, slightly below a forecast of 1.5%.

 

For the week, US indices fell 1.4%-3.2% with Nasdaq leading the losses. Dollar index climbed 0.85% for its largest percentage gain since late August. Brent crude rose 1.5% for its fourth weekly rise while WTI rose 2.4%, extending the winning streak to sixth consecutive week.

 

AT HOME

 

Sensex and Nifty fell 0.6% and 0.5% respectively, extending the losing streak to fourth straight day and closing at the lowest level after 20th September. Sensex settled at 58765, down 360 points while Nifty lost 86 points to finish at 17532. Nifty mid-cap and small-cap indices managed to end marginally in the green. BSE Realty and Telecom indices were the top losers among the sectoral indices, down 1.7% and 1.3% respectively while Consumer Durables index rose 0.8%, becoming the top gainer, followed by 0.6% higher Healthcare and Metal indices.

 

FIIs net bought stocks and index futures worth Rs 131 cr and 416 cr respectively but net sold stock futures worth Rs 778 cr. DIIs were net sellers to the tune of Rs 613 cr.

 

Rupee appreciated 11 paise to end at 74.11/$.

 

For the week, Sensex and Nifty fell 2.1% and 1.8% respectively, snapping 5-week winning streak and suffering the biggest weekly cut in seven and five months respectively.

 

September GST collection stood at Rs. 1.17 lk cr. India's trade deficit surged to $22.94 bn in September as imports rose 85% to $56.38 bn while exports rose 21.4% to $33.4 bn.

 

Ashok Leyland September sales were up 14% y-o-y at 9533 units. Eicher reported 73% jump in VECV sales at 6070 units. Tata Motors sold 59156 units, a growth of 28%. TVS Motor sales rose 6% to 3.47 lk units. M & M tractor sales fell 7% to 40331 units.

 

OUTLOOK

 

Today morning, Nikkei and Hang Seng are down 1.2% and 1.8% respectively while SGX Nifty is suggesting a marginally higher start for our market.

 

In Friday's report we had said that 17326, the low made the previous week, was the next downside level to eye and that 17782, the top made Wednesday, was the immediate hurdle.

 

Nifty, after touching a low of 17452, rebounded to end at 17532.

 

17326 the bottom made on 21st September continues to be immediate support to eye; 17781, is the immediate hurdle on the hourly chart, above which, 17947, the top made last week, would be the bigger hurdle to eye.

 

For Banknifty, 36876, the low made Friday, is the immediate support, below which 36525 and 36151, the bottoms made on 21st September and 7th September respectively, would be the subsequent downside levels to eye; 37900 is the immediate hurdle on the hourly chart, above which, 38377, the top made during the week, would be the bigger hurdle to eye.