16600 BELOW 16788; 17150 IS THE IMMEDIATE HURDLE

 

16600 BELOW 16788; 17150 IS THE IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices nosedived 1.5%-2.8% on concerns that the Fed will keep raising rates to fight inflation and as Apple led technology stocks lower on demand concerns. S & P 500 closed at new 2022 low.

 

Jobless claims for the week ended Sept. 24 totaled 193,000, hitting a five-month low. U.S. GDP fell 0.6% y-o-y in the second quarter, compared with a much larger contraction of 1.6% in the first quarter.

 

Apple plunged 4.9% to lead the losers as the tech giant has faced reports of declining demand for its new products, specifically the iPhone 14 series.

 

US 10-year treasury yield rose 6 bps to 3.79%. Dollar index fell 0.8% to 111.77. Pound surged 2% against the dollar. Gold inched up 0.1% to $1661 per ounce.

 

Brent crude futures settled at $88.49 per barrel for a loss of 0.9% and WTI futures ended the day 1.1% lower at $81.23 per barrel.

 

European markets fell 1.5%-2.4%. Data showed euro zone economic sentiment fell sharply and by more than expected in September. German inflation jumped to 10.9% this month, far beyond expectations for a reading of 10%.

 

AT HOME

 

After starting a percent higher, Sensex and Nifty plunged through the session end with cuts of 0.3% and 0.2% respectively, extending the losing streak to seventh consecutive session. Sensex settled at 56410, down 188 points while Nifty lost 40 points to finish at 16818. Nifty mid-cap and small-cap indices however gained 0.4% and 0.6% respectively. BSE Metal and Healthcare indices climbed 1.5% and 1.4% respectively, becoming top gainers among the sectoral indices while Utilities and Power indices were the top losers, down 1.4% and 1.3% respectively.

 

FIIs net sold stocks and index futures worth Rs 1599 cr and 1007 cr respectively but net bought stock futures worth Rs 1229 cr. DIIs were net buyers to the tune of Rs 3162 cr.

 

Rupee appreciated 8 paise to end at 81.86/$.

 

India's April-June current account deficit stood at $23.9 bn vs $13.4 bn QoQ. As a percentage of GDP, it stood at 2.8% Vs 0.9% surplus YoY and 1.5% deficit QoQ.

 

Government reduced its H2 borrowing by Rs 10000 cr to 14.21 lk cr.

 

OUTLOOK

 

China's September Manufacturing PMI has come in at 50.1, beating estimate of 49.7. Composite PMI stood at 50.9.

 

Today morning, Asian markets are trading with cuts of 0.1%-1.4% and SGX Nifty is suggesting around 40 points lower start for our market.

 

In yesterday's report we had said that 16800, where 20-week moving average is placed, continued to be important immediate support while 17200-17290, the gap created by Monday's gap-down opening, was the resistance zone.

 

Nifty, after touching a high of 17026, plunged to 16788 and closed at 16818.

 

16788, the low made yesterday, which coincided with 20-week moving average, continues to be immediate support, upon breach of which, 16600 would be the next downside level to eye; 17150 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 37250, the low made in August, continues to be the downside level to eye; 38700 is immediate hurdle.

 

RBI's rate-setting panel is liekly to announce a 50 bps repo rate hike at the end of its three-day meeting today. Policy stance may be changed to "Neutral" from "Withdrawal of Accommodation".