STAY SHORT WITH THE STOP-LOSS OF 19550

 

STAY SHORT WITH THE STOP-LOSS OF 19550

 

WORLD MARKETS

 

After a flat to positive start, U.S. indices saw a sustained downward move through the session to end lower by 0.5%-1.2% as minutes of the July Fed meeting hinted at potentially higher rates.

 

“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the minutes stated.

 

U.S. new home construction rose 3.9% month-over-month to 1.45 million in July, topping estimate of 1.44 million. However, building permits increased just 0.1% to 1.44 million and marking a 13% y-o-y decline.

 

U.S. 10-year treasury yield rose 4 bps to 4.252%. Dollar index rose quarter of a percent to 103.45. Gold fell half a percent to $1892 per ounce.

 

Brent crude futures fell 1.7% to settle at $83.45 a barrel while WTI fell 2% to $79.38.

 

In Europe, FTSE and CAC fell 0.4% and 0.1% respectively while DAX inched up 0.1%. In UK's July CPI rose 6.8%, in line with expectations and marked a sharp decline from 7.9% in June. However, core inflation stood unchanged from June at 6.9% in July, higher than the expected 6.8%.

 

AT HOME

 

After falling more than half a percent at the open, benchmark indices saw a sustained northward move through the session to end higher by a fifth of a percent, extending the winning streak to second straight day. Sensex settled at 65539, up 137 points while Nifty added 30 points to finish at 19465. Nifty mid-cap and small-cap indices rose 0.1% and 0.6% respectively, snapping a 3-session losing streak. Nifty Media and Realty indices were the top gainers among the sectoral indices, up 1.2% and 1.1% respectively while Metal and Private Bank indices were the top losers, down 0.9% and 0.5% respectively.

 

FIIs net bought stocks and index futures worth Rs 723 cr and 221 cr respectively but net sold stock futures worth Rs 1282 cr. DIIs were net buyers to the tune of Rs 2406 cr.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.4%-1.2% and GIFT Nifty is suggesting around 80 points lower start for our market.

 

In yesterday's report we had said that 19160 and 18934, the 61.8% and 78.6% retracement levels of the 18646-19991 upmove seen since 26th June, were the next downside levels to eye and had advised holding on to short positions with the stop-loss of 19550.

 

Nifty, after touching a low of 19317, rebounded to end at 19465 but is set to open below 19400 today.

 

19160 and 18934, the 61.8% and 78.6% retracement levels of the 18646-19991 upmove seen since 26th June, continue to be next downside levels to eye; 19550 continues to be immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

 

For Banknifty, 43345, the bottom made in June, is the next support;44500 is the immediate hurdle on the hourly chart, with the stop-loss of which, trading shorts can be held on to.

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