17166 IS THE NEXT SUPPORT; TRAIL STOP-LOSS TO 17650

 

17166 IS THE NEXT SUPPORT; TRAIL STOP-LOSS TO 17650

 

WORLD MARKETS

 

US indices tumbled 1.6%-1.8% on Friday as surging interest rates and foreign currency turmoil heightened fears of a global recession. The Dow notched a new low for the year and closed below 30,000 for the first time since June 17.

 

US 10-year hit an 11-year high of 3.829% earlier in the session but last traded 3 bps lower at 3.691%.  2-year Treasury hit a fresh 15-year record of 4.266% before settling at 4.212%. Dollar index surged 1.6% to 113.02, it's highest level since May 2002.

 

Brent crude futures fell $4, or 4.4%, to $86.46 a barrel, while WTI crude fell $4.45, or 5.3%, to $79.10.

 

In Europe, FTSE and DAX fell 2% each while CAC tumbled 2.3%. The British pound hit a fresh more than three-decade low against the U.S. dollar after U.K. government announced a raft of tax cuts as the country prepares for a recession. Also, UK PMI figures showed the downturn in Britain’s economy worsened this month as companies battled soaring costs and faltering demand. The euro slipped to its lowest level since October 2002, after S&P Global’s flash euro zone Composite PMI fell further in September.

 

For the week, US indices nosedived 4%-5.1% for their fifth negative week in six.

 

For the week, Sensex and Nifty fell 1.3% and 1.2% respectively, extending the losing streak to second straight week.

 

AT HOME

 

Benchmark indices nosedived 1.7% each, extending the losing streak to third straight day and closing at the lowest level after 29th August. Sensex settled at 58098, down 1020 points while Nifty lost 302 points to finish at 17327. Nifty mid-cap and small-cap indices tumbled 2.4% and 2% respectively. All the BSE sectoral indices ended in red, with Utilities and Power indices leading the losses, down 3.5% and 3.4% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2900 cr, 3373 cr and 2991 cr respectively. DIIs were net buyers to the tune of Rs 299 cr.

 

Rupee depreciated 13 paise to end at 80.99/$.

 

For the week, Sensex and Nifty fell 1.3% and 1.2% respectively, extending the losing streak to second straight week. This was the lowest weekly close after the week ended 29^TH July.

 

OUTLOOK

 

Today morning, Nikkei is down more than 2%, Shanghai is off 0.2% while Hang Seng is flat. SGX Nifty is suggesting nearly 150 points lower start for our market.

 

In Friday's report we had said that 17500-17430 was the next support area  for Nifty and had advisd holding on to short positions with the stop-loss of 17919.

 

Nifty plunged to 17291 before closing at 17327 and is set to open near 17200 today.

 

17166, the low made on 29th August, is the next important support. If that also gives way, 200-DMA, placed around 17000, would be next downside level to eye; 17650 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 38800, the low of the September month so far, which also coincides with 78.6% retracement level of the upmove seen after 29th August, is the next support, below which, 37943, the low made on 29th August, would be the next downside level to eye; 40800 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.