TRAIL STOP-LOSS TO 17200

 

TRAIL STOP-LOSS TO 17200

 

WORLD MARKETS

 

US indices soared 1.3%-2.6% to reverse two-day slide, as better-than-expected economic data helped allay recession fears.

 

A surprise rebound in July services PMI helped shake off worries that the U.S. has already fallen into a recession. Data on durable goods orders and manufacturing in June were also better than expected.

 

St. Louis Federal Reserve President James Bullard said he doesn’t think the U.S. is currently in a recession, and that rate hikes to tame high inflation will continue.

 

US 10-year treasury yield, after making an intraday high of 2.849%, reversed to end 5 bps lower at 2.706%. Dollar index was flattish at 106.38. Gold rose 0.3% to $1765 per ounce.

 

Oil fell after U.S. data showed crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ said it would raise its oil output target by 100,000 barrels per day. Brent crude futures settled down $3.76, or 3.7%, at $96.78 a barrel and WTI crude futures fell $3.76, or 4%, to $90.66.

 

European markets rose 0.5%-1%.  Euro zone retail sales dropped by more than expected in June, falling 1.2% month-on-month for a 3.7% y-o-y decline.

 

AT HOME

 

After falling more than half a percent in the morning, Sensex and Nifty surged in noon trade to end higher by 0.4% and 0.25% respectively, extending the winning streak to sixth straight day. Sensex settled at 58350, up 214 points while Nifty added 42 points to finish at 17388. Nifty mid-cap and small-cap indices however fell 0.7% and 0.5% respectively, snapping 5-session winning streak. BSE IT and Teck indices were the top gainers among the sectoral indices, up 1.3% and 1.1% respectively while Telecom index was the top loser, down 1.3%, followed by 0.8% lower Capital Goods and Auto indices.

 

FIIs net bought stocks worth Rs 765 cr but net sold index futures and stock futures worth Rs 575 cr and 967 cr respectively. DIIs were net sellers to the tune of Rs 518 cr.

 

Rupee depreciated 45 paise to end at 79.16/$.

 

India's July services PMI stood at 55.5, down from 59.2 month-on-month and marking the lowest level in 4 months. Composite PMI fell to 56.6 from 58.2.

 

OUTLOOK

 

Today morning, Asian markets are trading with gains of 0.4%-1.8% and SGX Nifty is suggesting around 80 points higher start for our market.

 

In yesterday's report we had said that 17487, the 78.6% retracement level of the 18115-15183 fall, was the next upside level to eye, and had advised raising the stop-loss in long positions to 17025.

 

Nifty, after touching a low of 17225, rebounded to end at 17388 and is set to open near 17450 today.

 

17487, the 78.6% retracement level of the 18115-15183 fall, continues to be upside level to eye, upon crossover of which, 17750, around which a trendline adjoining tops made in January and April is placed, would be the next target; Immediate support on the hourly chart has moved up to 17200, with the stop-loss of which, trading longs can be held on to.

 

In case of Banknifty, 38637, the 67% retracement levels of the entire 41830-32155 fall, is the next upside levels to eye; 37400 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.