NIFTY RETREATS FROM 34-DMA HURDLE

 

NIFTY RETREATS FROM 34-DMA HURDLE

 

WORLD MARKETS

 

After plunging 2% and more in the initial trade on recession worries, US indices made a spectacular rebound as falling treasury yields boosted tech stocks. Nasdaq and S & P 500 closed higher by 1.8% and 0.2% respectively while Dow cut the losses to just 0.4%.

 

US 10-year and 2-year Treasury yield briefly inverted, a move that has a strong historical track record as a recession indicator. The Bank of England said that the global economic outlook had “deteriorated materially.” The euro fell to its lowest level in two decades as fears of a recession in the euro zone ramped up.

 

May factory orders showed stronger-than-expected growth.

 

US 10-year treasury yield fell 11 bps to 2.809%. Dollar index surged 1.3% to 106.49. Gold tumbled 2.3% to $1765 per ounce.

 

WTI crude settled 8.24%, or $8.93, lower at $99.50 per barrel and Brent crude plunged 9.4%, or $10.73, to $102.77 per barrel.

 

European markets tumbled 2.5%-3%. The July Sentix Economic Index showed investor morale across the 19-country euro zone has plunged to its lowest level since May 2020. June’s euro area services PMI came in at 53.0, slightly above a forecast of 52.8 but down from 56.1 in May.

 

AT HOME

 

After gaining more than a percent in the morning, benchmark indices nosedived in noon to end lower by a fifth of a percent. Sensex settled at 53134, down 100 points while Nifty lost 24 points to finish at 15810. Nifty mid-cap and small-cap indices fell 0.3% and 0.1% respectively. BSE IT and Teck indices slipped 0.6% each, becoming top losers among the sectoral indices while Power and Utilities indices were the top gainers, up 0.6% each.

 

FIIs net bought stocks, index futures and stock futures worth Rs 1296 cr, 922 cr and 247 cr respectively. DIIs were net sellers to the tune of Rs 258 cr.

 

Rupee plunged 42 paise to end at record low of 79.34/$.

 

OUTLOOK

 

Today morning, Nikkei is down more than a percent while Hang Seng and Shanghai are off 0.6% each. SGX Nifty is suggesting around 40 points higher star for our market.

 

In yesterday's report we had said that 34-DMA, placed around 16020, continued to be immediate hurdle.

 

Nifty, after touching a high of 16025, plunged all the way to 15785 before closing at 15810.

 

16025, the top made yesterday, which coincided with 34-DMA, is the important immediate hurdle, a crossover of which is required for a fresh upmove; On the way down, immediate support on the hourly chart has moved up to 15600, with the stop-loss of which, existing longs can be held on to.

 

34361, the top made yesterday, which coincided with the upper end of the gap created by gap-down opening on 13th June, is the immediate hurdle; 33300 is the immediate support.