25600 IS NEXT BIG TARGET; 25000-24950 IS THE SUPPORT ZONE

 

25600 IS NEXT BIG TARGET; 25000-24950 IS THE SUPPORT ZONE

 

WORLD MARKETS

 

U.S. indices climbed 0.6%-1.1% on Friday.

 

The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, rose 0.2% on a monthly basis in July and 2.5% y-o-y. The result was in line with estimates. Excluding food and energy, it also rose 0.2% from the prior month.

 

U.S. 10-year treasury yield rose 4 bps to 3.907%. Dollar index rose 0.4% to 101.73. Gold fell 0.7% to $2503 per ounce.

 

Brent crude futures for October delivery, settled 1.4% lower at $78.80 while WTI fell 3.1% to $73.55 a barrel.

 

In Europe, FTSE, DAX and CAC ended marginally in the red. Euro zone inflation fell to a three-year low of 2.2% in August, in line with expectations, and below July’s 2.6% print. France’s preliminary, EU-harmonized consumer price index came in at 2.2% for August on an annual basis, down from the 2.7% print of July. Italy’s harmonized CPI came in at 1.3% on an annual basis in August, less than in the previous month.

 

For the week, Dow and S & P 500 gained 0.9% and 0.2% respectively while Nasdaq fell 0.9%. U.S. 10-year treasury yield rose 10 bps. Dollar index rose 1%, snapping a 5-week losing streak. Gold fell 0.4%. WTI crude fell 1.7% while Brent fell 0.3%.

 

For the month, U.S. indices gained 0.7%-2.3%, with the Dow and S & P 500 extending the winning streak to fourth consecutive month. U.S. 10-year treasury yield fell 10 bps. Dollar index fell 2.2%. Gold rose 2.3%. Brent crude fell 2.4% while WTI crude fell 3.6%.

 

AT HOME

 

Benchmark indices gained three tenth of a percent each, hitting fresh record highs and Nifty extending the winning streak to 12th consecutive session. Sensex settled at 82365, up 231 points while Nifty added 84 points to finish at 25235. Nifty mid-cap and small-cap indices gained 0.7% and 0.5% respectively. Except 0.4% and 0.2% lower Media and FMCG indices respectively, all the NSE sectoral indices ended higher, with Realty and Pharma being the top gainers, up 1.8% and 1.5% respectively.

 

FIIs net bought stocks, index futures and stock futures worth Rs 5318 cr, 2276 cr and 4370 cr respectively. DIIs were net sellers to the tune of Rs 3198 cr.

 

Rupee appreciated 1 paise to end at 83.86/$.

 

For the week, Sensex and Nifty gained 1.6% each, extending the winning streak to third straight week and hitting fresh record highs.

 

OUTLOOK

 

Over the weekend, China's official PMI for August came in at a six-month low of 49.1, a faster contraction compared to the 49.4 seen in July.

 

Today morning, Nikkei is up 0.4% while Hang Seng and Shanghai are down 1.4% and 0.5% respectively. GIFT Nifty is suggesting a marginally higher start for our market.

 

In Friday's report we had said that 25200-25250 is the next target area, while 24900-24850 continued to be immediate support zone, with the stop-loss of which, trading longs could be held on to.

 

Nifty, after touching a high of 25268, ended at 25235.

 

25600, around which a rising trendline adjoining recent tops on daily chart is placed, is the next big upside target to eye; 25000-24950 is the immediate support on the hourly chart, with the stop-loss of which, trading longs can be held on to.

 

For Banknifty, 51500, the 50% retracement levels of the entire 53357-49654 fall, is the immediate hurdle, upon crossover of which, 51943 and 52565, the 61.8% and 78.6% retracement levels of this fall, would be next upside levels to eye.

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