19223 BELOW 19437; 19750-19800 CONTINUES TO BE RESISTANCE ZONE

 

19223 BELOW 19437; 19750-19800 CONTINUES TO BE RESISTANCE ZONE

 

WORLD MARKETS

 

U.S. indices fell 1.3%-1.9%, with the Dow turning negative for the year, on concern that higher interest rates would freeze the housing market and tip the economy into a recession.

 

The August job openings survey showed 9.6 million vacancies in the month, notably higher than the consensus estimate of 8.8 million, indicating continued strength in the labor market.

 

Fed Vice Chair for Supervision Michael Barr said rates likely will remain elevated “for some time.” And Cleveland Fed President Loretta Mester said “we may well need to raise the fed funds rate once more this year and then hold it there for some time.”

 

U.S. 10-year treasury yield rose 12 bps to 4.798%. The average rate on a 30-year fixed mortgage neared 8%. Dollar index was little changed at 107.08. Gold fell 0.3% to $1823 per ounce.

 

Brent crude futures settled 21 cents higher at $90.92 a barrel, and WTI settled up 41 cents at $89.23 per barrel.

 

European markets fell 0.5%-1.6%. Data revealed an outgoing downturn in manufacturing output, as new orders fell by a near-record level.

 

AT HOME

 

Sensex and Nifty fell 0.5% and 0.6% respectively, with the later closing at the lowest level after 1st September, 2023. Sensex lost 316 points to settle at 65512 while Nifty finished at 19528, down 109 points. Nifty mid-cap and small-cap indices gained 0.2% and 0.5% respectively, extending Friday's upmove. Nifty PSU Bank index surged 2.4%, becoming top gainer among the sectoral indices, followed by 0.6% higher Consumer Durables index. Oil & Gas and Auto indices were the top losers, down 1.2% each.

 

FIIs net sold stocks, index futures and stock futures worth Rs 2034 cr, 1839 cr and 1892 cr respectively. DIIs were net buyers to the tune of Rs 1361 cr.

 

Rupee depreciated 17 paise to end at 83.21/$.

 

India's September manufacturing PMI came in at 57.5, down from 58.6 in the previous month.

 

OUTLOOK

 

Nikkei and Hang Seng are down 2% and 0.7% respectively while GIFT Nifty is suggesting around 130 points gap-down start for our market.

 

In yesterday's report we had said that 19437, the 78.6% retracement level of the 19223-20222 upmove, continues to be next support while 19750-19800 was the immediate resistance zone.

 

Nifty plunged to 19479 before closing at 19528. The benchmark is set to open below 19450 today.

 

19437, the 78.6% retracement level of the 19223-20222 upmove, continues to be next support. If this level breaks, Nifty might revisit 19223 bottom made on 31st August. On the way up, 19750-19800 continues to be immediate resistance zone.

 

For Banknifty, 44182, the low made last week, which coincided with a trendline adjoining bottoms made on 16th August and 1st September respectively, continues to be immediate support, upon breach of which, 43800-43600 would be next support area. On the way up, 44800-44900 is the immediate resistance zone.

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