TRAIL STOP-LOSS TO 19550

 

TRAIL STOP-LOSS TO 19550

 

WORLD MARKETS

 

U.S. indices plunged 1%-1.2% yesterday, with the Dow snapping a 3-day win streak, as concern over the state of the global economy — China in particular — and a decline in U.S. banks combined to pressure markets.

 

Bank shares fell after Fitch warned it may have to downgrade credit rating dozens of banks, including JPMorgan Chase. Regional banks also traded lower after Minneapolis Fed President Neel Kashkari spoke in favor of “significantly further” capital regulation.

 

U.S. July retail sales increased 0.7% on a month-over-month basis, beating estimate of 0.4% rise.

 

Meanwhile, China reported disappointing economic data and its central bank made a surprise rate cut. Industrial production increased by 3.7% y-o-y in July, missing expectations. Retail sales also grew less than expected, and the People’s Bank of China lowered interest rates by 15 bps to 2.5% from 2.65%.

 

U.S. 10-year treasury yield rose 2 bps to 4.217%. Dollar index was flat at 103.20. Gold fell 0.3% to $1902 per ounce.

 

European markets fell 0.9%-1.6%.

 

AT HOME

 

After falling just under a percent in the initial trade, benchmark indices recouped all the losses and some more through rest of the session to end marginally higher. Sensex settled at 65401, up 79 points while Nifty added 6 points to finish at 19434. Nifty mid-cap and small-cap indices ended lower by 0.2% and 0.7% respectively, extending the losing streak to third straight day. Nifty Metal index nosedived 2.1%, becoming top loser among the sectoral indices, followed by 0.7% lower PSU Bank and Realty indices. Media and IT indices were the top gainers, up 0.9% and 0.7% respectively.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2324 cr, 440 cr and 1120 cr respectively. DIIs were net buyers to the tune of Rs 1461 cr.

 

Rupee depreciated 10 paise to end at 82.95/$.

 

CPI inflation rose to a 15-month high of 7.44% in July. Core inflation however remained below 5%.

 

ITC delivered a strong Q1. Cigarette volumes beat estimate and FMCG revenue crossed Rs. 5000 cr.

 

OUTLOOK

 

Today morning, Asian markets are trading with cuts of 0.5%-1.2% and GIFT Nifty is suggesting around 75 points lower start for our market.

 

In Monday's report we had said that 19296, continued to be immediate support, upon breach of which, 19160 and 18934, the 61.8% and 78.6% retracement levels of the 18646-19991 upmove seen since 26th June, would be next downside levels to eye; We had also advised holding on to short positions with the stop-loss of 19645.

 

Nifty, after touching a low of 19257, rebounded to end at 19434 and is set to open near 19350 today.

 

19160 and 18934, the 61.8% and 78.6% retracement levels of the 18646-19991 upmove seen since 26th June, are the next downside levels to eye; 19550 is the 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;44700 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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