17166 BELOW 17468; 17925 IS IMMEDIATE HURDLE

 

17166 BELOW 17468; 17925 IS IMMEDIATE HURDLE

 

WORLD MARKETS

 

US indices fell 0.4%-0.9% on Friday, reacting to an ugly earnings warning from FedEx about the global economy.

 

FedEx plunged 21.4% for its worst daily drop ever, after it withdrew its full-year guidance and said it will implement cost-cutting initiatives to contend with soft global shipment volumes as the global economy “significantly worsened.”

 

The University of Michigan’s preliminary September reading on the overall index on consumer sentiment came in at 59.5, up from 58.6 in the prior month.

 

The World Bank on Thursday warned of a global recession in 2023 and said central bank hiking may not be enough to bring down inflation.

 

US 10-year treasury yield was little changed at 3.451%. Dollar index fell 0.1% to 109.68. Sterling fell to 37-year low against the dollar as a combination of dollar strength and recession warnings weighed on the U.K.’s currency. Offshore Yuan fell past the critical threshold of 7 per dollar for the first time in more than two years. Spot gold rose 0.6% to $1,674 per ounce.

 

Brent crude futures settled 51 cents higher at $91.35 per barrel while WTI crude futures ended the day at $85.11 per barrel for a gain of one cent.

 

European markets fell 0.6%-1.7%. UK August retail sales fell 1.6%.

 

Earlier, Shanghai Composite ended 2.3% lower, despite China’s industrial production and retail sales figures for August beating expectations.

 

For the week, US indices fell 4.1%-5.5%, suffering their fourth losing week in five.  It was the worst week for the S&P 500 and Nasdaq since June. European markets fell 1.6%-2.6%. Asian markets fell 1.6%-4.2% with Shanghai leading the losses.  US 10-year treasury yield rose 14 bps to 3.45%. Dollar index rose 0.8%. Oil had third consecutive weekly loss. Gold tumbled 2.4%, and hit lowest level since April 2020.

 

AT HOME

 

Sensex and Nifty tumbled 1.8% and 1.9% respectively, suffering their worst fall since 16th June. Sensex settled at 58840, down 1039 points while Nifty lost 346 points to settle at 17530. Nifty mid-cap and small-cap indices nosedived 2.8% and 2.6% respectively. All the BSE sectoral indices ended in red, with Realty and IT indices leading the losses, down 3.5% and 3.4% respectively.

 

FIIs net sold stocks and stock futures worth Rs 3260 cr and 3467 cr respectively but net bought index futures worth Rs 838 cr. DIIs were net sellers to the tune of Rs 37 cr.

 

Rupee depreciated 4 paise to end at 79.74/$.

 

For the week, Sensex and Nifty fell 1.6% and 1.7% respectively, giving away all the gains made last week.

 

OUTLOOK

 

Japan’s market is closed today for a holiday. Shanghai is little changed while Hang Seng is down 0.7%. SGX Nifty is suggesting around 20 points higher start for our market.

 

In Friday's report we had said that 17770, the low made Wednesday, was the immediate support, upn breach of which, 34-DMA, placed around 17600, would be next downside level to eye.

 

Nifty broke 17770 and plunged all the way to 17497 before closing at 17530.

 

On the hourly chart, Nifty had made two bottoms at 17484 and 17468 on 7th and 1st September respectively. This makes 17484-17468 immediate support area. If it breaks, 17166, the low made on 29th August, would be the next downside level to eye; On the way up, 17925 is the immediate hurdle on the hourly chart, upon crossover of which, 18096, the top made during the week, would be next upside level to eye.

 

For Banknifty, 41840, the top made last week, is the immediate hurdle, upon crossover of which, 43000 would be next upside level to eye; On the way down, 40500, is the immediate support on the hourly chart, below which, 20-DMA, placed around 39700, would be next downside level to eye.