NIFTY ACHIEVES 10550 TARGET; 10417, 10350 NEXT SUPPORTS TO EYE

NIFTY ACHIEVES 10550 TARGET; 10417, 10350 NEXT SUPPORTS TO EYE

WORLD MARKETS

Dow and S & P 500 fell 0.8% each while Nasdaq plunged 1.8% on worries over rising interest rate.

The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2%.

Weekly initial jobless claims fell to 207,000, a near 49-year low.

US crude fell 2.7% to $74.33 while Brent was off 1.9% at $84.64 a barrel.

European markets fell 0.4%-1.5% with CAC leading the losses. Sterling climbed almost 0.6% against the dollar amid reports that the U.K. could join a customs union within the European Union.

AT HOME

Market mayhem continued as Sensex and Nifty nosedived 2.2% and 2.4% respectively, suffering worst percentage fall since 2nd February 2018 and 11th November 2016 respective and closing at the lowest level since 28th June 2018 and 24th May 2018 respectively. Sensex lost 806 points to settle at 35169 while Nifty finished at 10599, down 259 points. BSE mid-cap and small-cap indices fell 1.9% and 2.1% respectively. All the BSE sectoral indices ended in red with Oil & Gas and Energy indices leading the losses, down 6.6% each, followed by 3.3% lower IT index.

FIIs net sold stocks, index futures and stock futures worth Rs 2761 cr, 3157 cr and 365 cr respectively. DIIs were net buyers to the tune of Rs 1824 cr.

Rupee depreciated 24 paise to end at 73.58/$.

In a relief to fuel consumers, the Central Government reduced the prices of petrol & diesel by Rs 2.5 per litre effective immediately. The central government reduced the excise duties on petrol & diesel by Rs 1.5 per litre. While, the balance hit of Rs 1 will be taken by the oil marketing companies (OMC). Owing to this news, HPCL, BPCL and IOC plunged sharply. Marketing margins for these companies will come under pressure as they absorb the cost of Rs 1. The Rs 1.5 excise hit which the government will absorb, will lead to reduction in revenues for the government. However the Finance Minister stated that despite the hit in this excise revenue, the government remains committed to its fiscal deficit target of 3.3% of gross domestic product.

ICICI Bank soared following the news that MD and CEO Chanda Kochhar has quit the bank with immediate effect and Sandeep Bakshi has been appointed as MD and CEO for a period of five years.

OUTLOOK

Today morning, Nikkei and Hang Seng are down 0.3% each and SGX Nifty is suggesting about 60-80 points lower start for our market.

In yesterday's report we had said that upon sustained trading below 200-DMA placed around 10775, 10640 and 10550, which are the 61.8% and 67% retracement levels of the entire 9951-11760 upmove, would be the next downside levels to eye.

Nifty broke 200-DMA support at the open itself and plunged all the way to 10547 before closing at 10599, achieving both the targets mentioned above and vindicating our view.

A gap down opening today would take Nifty back in the vicinity of yesterday's low.

10418, the low made in May, is now the next downside support to eye below which 10350, where 20-month moving average is placed, would be the next crucial support. In the event of even 10350 not holding, be prepared for the retest of 9951 mark. 10820-10866, the erstwhile support zone, would now act as the immediate hurdle.

Key event to watch out today would be RBI's monetary policy review where a 25 bps repo rate hike is widely expected. Markets would also watch out whether the stance is changed from neutral to hawkish and other thinks like RBI's view on liquidity, debt market, rupee and growth.

NIFTY SET TO TEST 200-DMA

NIFTY SET TO TEST 200-DMA

WORLD MARKETS

US indices gained 0.1%-0.3%, but closed off the day high, weighing positive and negative effects from rising interest rates after the release of strong U.S. economic data.

A report from ADP and Moody's Analytics showed private payrolls in the U.S. increasing by 230,000 in September — the highest in seven months. The ISM non-manufacturing index reached its highest level on record.

The benchmark 10-year note yield traded near 3.14%, hitting its highest level since 2011. Dollar index rose more than half a percent to 95.99.

Reacting to rising rates, utilities and consumer product companies fell while Banks rose.

In a media interaction, Federal Reserve Chairman Jerome Powell said the U.S. central bank was "a long way" from neutral on interest rates

US oil rose 1.6% to $76.41 a barrel, touching fresh as the market focused on upcoming U.S. sanctions on Iran and shrugged off a surprisingly big build in U.S. crude stockpiles and reports of higher Saudi Arabian and Russian production. Brent rose 1.8% to $86.29, its best level since October 2014.

European markets added 0.4%-0.8%. An Italian newspaper reported that the government was planning to lower its deficit from 2.2% in 2020, to 2% in 2021, from an expected 2.4% next year.

AT HOME

Benchmark indices nosedived nearly a percent to close at the lowest level since 9th July 2018. Sensex lost 550 points to settle at 35975 while Nifty finished at 10858, down 150 points. BSE Mid-cap index tumbled 1.1% but Small-cap index managed to end higher by 0.2%. BSE Bankex and Telecom indices nosedived 2.9% and 2.8% respectively, becoming top gainers among the sectoral indices while Metal index soared 1.7%, becoming top gainer, followed by 0.65 higher Oil & Gas index.

FIIs net sold stocks, index futures and stock futures worth Rs 1550 cr, 700 cr and 50 cr respectively. DIIs were net buyers to the tune of Rs 1402 cr.

Rupee depreciated 43 paise to end at 73.34/$.

Government yesterday announced a 6% hike in wheat support price to Rs 1,840 per quintal and up to 21% increase in other rabi crops.

RBI has allowed state-owned oil marketing companies to raise $10 billion from overseas market to meet their working capital needs.

OUTLOOK

Today morning, Nikkei is down 0.2% and Hang Seng is off 1%. SGX Nifty is trading around 10775, suggesting a whopping 115 points lower start for our market.

For past many sessions, we have been saying that 34-week moving average and 200 DMA are important support levels to eye. Nifty, on Monday, after touching a low of 10821, which exactly coincided with 34-week moving average, rebounded sharply to 11035 only to come back to close at 10858 yesterday.

A huge gap down today is expected to take the benchmark near the 200-DMA placed around 10775.

Upon sustained trading below 10775, 10640 and 10550, which are the 61.8% and 67% retracement levels of the entire 9951-11760 upmove, would be the next downside levels to eye.

11035, the top made on Monday, would now be the immediate hurdle.

NIFTY REBOUNDS AFTER TESTING 34-WEEK MOVING AVERAGE; 11145 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER TESTING 34-WEEK MOVING AVERAGE; 11145 IS THE IMMEDIATE HURDLE

WORLD MARKETS

Dow gained 0.5% while S & P 500 ended flat and Nasdaq fell half a percent, with the Dow hitting a record high , boosted by gains in Intel and optimism around global trade.

US equities had strong gains on Monday after Canada joined the U.S. and Mexico in a new trade deal. The United States-Mexico-Canada Agreement, or "USMCA" for short, will see all three countries compromise on certain trade aspects. More market access will be granted to U.S. dairy farmers, while Canada has agreed to effectively cap automobile exports to the States.

US crude fell 7 cents to settle at $75.23 a barrel, having hit a nearly four-year high of $75.91 earlier in the session. Brent fell 32 cents to $84.66 after reaching a new four-year high of $85.45 in the previous session.

European markets fell 0.2%-1% with Spain leading the losses on worries over Italy's budget. Luigi Di Maio, the head of the Five Star Movement in Italy, defended the country's 2.4 percent deficit target for 2019. A prominent Italian lawmaker said Rome would enjoy more favorable economic conditions outside the euro zone.

AT HOME

After falling a percent in the morning, Sensex and Nifty saw a steep rebound in noon to end higher by 0.8% and 0.7% respectively, breaking 3-day losing streak. Sensex settled at 36526, up 299 points while Nifty added 78 points to finish at 11008. BSE mid-cap index rose 0.5% but small-cap index fell 0.2%. BSE IT and Teck indices climbed 2.4% and 2% respectively, becoming top gainers among the sectoral indices while Realty index fell 1.4%, becoming top loser, followed by 1.3% lower Energy and Telecom indices.

FIIs net sold stocks worth Rs 1842 cr but net bought index futures and stock futures worth Rs 9 cr and 417 cr respectively. DIIs were net buyers to the tune of Rs 1805 cr.

Rupee depreciated 43 paise to end at 72.91/$.

Maruti posted 0.5% y-o-y dip in September sales at 1.62 lakh units. Bajaj Auto sales jumped 17% to 5.02 lakh units and TVS Motors sold 17.8% higher vehicles at 4.24 lakh units. Ashok Leyland sold 19373 units, a growh of 26% while Tata Motors sales were up 20.1% at 69500 units. Eicher Motors' Royal Enfield sales were up 2% at 71662 units. Hero MotoCorp sales rose 6.8% to 7.69 lakh units.

India's Nikkei Manufacturing PMI strengthened slightly in September to 52.2, up from 51.7 in August.

GST collection for August stood at Rs 94,442 crore compared with Rs 93,960 crore in July.

Stocks of IL&FS Engineering and IL&FS Transport hit 20% upper circuit after government moved to National Company Law Tribunal (NCLT) in Mumbai, seeking to supersede IL&FS' board with a new board led by veteran banker Uday Kotak.

The National Company Law Tribunal (NCLT) approved the takeover of IL&FS board by government nominees. A new six-member board led by Uday Kotak will take charge of the company. The newly constituted board will submit an assessment plan in the next two weeks.

OUTLOOK

Markets in China and South Korea are shut today. Nikkei and Hang Seng are down 0.6% and 0.2% respectively while SGX Nifty is trading around 11020, suggesting about 40 points lower start when compared to Monday's close of Nifty futures.

At the risk of repeating, we have been mentioning that 10866-10770 is the crucial support zone for Nifty as 10866 is where trendline adjoining bottoms made in December 2016 and March 2018 is placed while 34-week moving average and 200-DMA are placed around 10800 and 10770 respectively.

Nifty touched a low of 10821 on Monday where 34-week moving average was placed. From there, it rebounded sharply to end at 11008 but is slated to open lower today.

10820, which coincided with 34-week moving average, followed by 200-DMA placed at 10775, continues to be crucial supports to eye.

11145, the top made last Wednesday, is the immediate hurdle, a crossover of which is required for a fresh upmove.

NIFTY REBOUNDS FROM 10866-10770 SUPPORT ZONE; 11145 IS IMMEDIATE HURDLE

NIFTY REBOUNDS FROM 10866-10770 SUPPORT ZONE; 11145 IS IMMEDIATE HURDLE

WORLD MARKETS

Dow and Nasdaq gained marginally while S & P 500 ended flat on Friday.

Consumer spending rose 0.3% in August while the personal consumption expenditures (PCE) price index minus food and energy was unchanged for the month of August.

US oil rose 1.6% to $73.25 and Brent futures rose $1, or 1.2% to $82.72 as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production.

Main European markets fell 0.5%-1.5% while Italy plunged 3.7% after the Italian government set a budget deficit target that is three times higher than the previous government had planned.

Euro area inflation increased to 2.1% in September, but that core inflation disappointed, falling to 0.9%. The euro fell over half a percent versus the dollar to $1.1576.

AT HOME

After a rollercoaster day of trade, Sensex and Nifty ended lower by 0.3% and 0.4% respectively, extending the losing streak to third straight day and closing at the lowest level since 9th July 2018. Sensex fell 97 points to settle at 36227 while Nifty finished at 10930, down 47 points. BSE mid-cap and small-cap indices nosedived 1.6% and 3.4% respectively to close at the lowest level since 10th August 2017 and 30th March 2017 respectively. BSE Metal and Realty indices collapsed 5% and 4.8% respectively, becoming top losers among the sectoral indices while Oil & Gas and FMCG indices gained 0.1% each.

FIIs net sold stocks worth Rs 1700 cr but net bought index futures and stock futures worth Rs 702 cr and 874 cr respectively. DIIs were net buyers to the tune of Rs 3256 cr.

Rupee appreciated 11 paise to end at 72.48/$.

For the week, Sensex and Nifty lost 1.7% and 1.9% respectively, extending the losing streak to fourth straight week.

At a meeting held over the weekend, IL&FS shareholders approved company's plans to raise as much as Rs 15,000 crore through a non-convertible debt issue, hike the firm’s borrowing limit by 40% to Rs 35,000 crore and increase its share capital to enable a rights offering,

Government, on Friday said it will borrow Rs 2.47 lakh crore via bonds in the second half of the financial year, cutting the market borrowing by Rs 70,000 crore. The market was anticipating a borrowing of Rs 2.68 lakh crore.

OUTLOOK

Data released yesterday showed the Caixin/Markit Manufacturing PMI fell to 50.0 in September from 50.6 in August.

The Chinese and Hong Kong markets are closed today.  Nikkei is up about half a percent and SGX Nifty is suggesting about 15 points higher start for our market.

For past couple of sessions, we have been mentioning that 10866-10770 is the crucial support zone as 10866 is where trendline adjoining bottoms made in December 2016 and March 2018 is placed while 34-week moving average and 200-DMA are placed at 10800 and 10770 respectively.

Nifty, on Friday, touched a low of 10850, testing this support zone, and rebounded to end at 10930.

10866-10770 continues to be important support zone to eye. If this support zone gives way, 10640 followed by 10550, the 61.8% and 67% retracement levels of the 9951-11760 upmove, would be the next downside targets to eye.

On the way up, 11145, the top made during last week, is the immediate hurdle to eye above which 11250, the bottom made on 12th September, would be the next resistance.

Auto companies will report their September sales figures today.

11250-10866 CONTINUES TO BE IMMEDIATE RANGE

11250-10866 CONTINUES TO BE IMMEDIATE RANGE

WORLD MARKETS

US indices gained 0.2%-0.6%, with the S & P 500 breaking 4-day losing streak, as gains in Apple and Amazon led tech shares higher.

Trump accused China of intending to interfere in November's congressional elections. This prompted an immediate rejection from the Chinese government. Trump also criticized Canada for the slow pace of discussions concerning the overhaul of NAFTA.

US crude rose 55 cents to $72.12 and Brent added 21 cents to $81.55.

Dollar index rose about three fourth of a percent to 94.99 as Euro tumbled amid concerns over Italy's budget and deficit targets for next year.

European markets, except 0.6% lower Italy, gained 0.4%-0.5%.

AT HOME

After gaining a third of a percent in the initial trade, benchmark indices nosedived a percent from the top of the day to end lower by about two third of a percent. Sensex settled at 36324, down 218 points while Nifty lost 76 points to finish at 10977. BSE mid-cap and small-cap indices nosedived 2.2% and 2% respectively and closed at the lowest level since 22 August 2017 and 30 May 2017 respectively. Except a 0.8% and 0.6% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Realty index leading the losses, down 2.8%, followed by 2% lower Capital Goods and Finance indices.

FIIs net bought stocks and stock futures worth Rs 552 cr and 780 cr respectively but net sold index futures worth Rs 1536 cr. DIIs were net sellers to the tune of Rs 187 cr.

Rupee appreciated 2 paise to end at 72.59/$.

For the September derivative series, Nifty plunged 6%.

OUTLOOK

Today morning, Nikkei is up 1.4% while Hang Seng and Shnaghai are up 0.3% and 0.1% respectively. SGX Nifty is suggesting about 50 points higher strat for our market.

For past couple of sessions we have been mentioning that 10866-10750 is the crucial support zone as it hosts trendline adjoining bottoms made in December 2016 and March 2018, 34-week moving average as well as 200-DMA. Also, we have been pointing out that 11250 is the immediate hurdle, a crossover of which is required for a fresh upmove.

Nifty, after touching a low of 10866 last Friday, rebounded to touch a high of 11145 on Wednesday from where it eased to end at 10977 yesterday and is set to open above 11000 today.

11250 continues to be immediate hurdle to eye. Also, 10866-10750 continues to be crucial support zone.

11250 CONTINUES TO BE IMMEDIATE HURDLE; 10866-10750 CONTINUES TO BE IMPORTANT SUPPORT ZONE

11250 CONTINUES TO BE IMMEDIATE HURDLE; 10866-10750 CONTINUES TO BE IMPORTANT SUPPORT ZONE

WORLD MARKETS

US indices fell 0.2%-0.4% on the back of U.S. Federal Reserve Chairman Jerome Powell's comments on inflation after the central bank decided to increase interest rates.

Fed raised its target overnight rate by 25 bps to a range of 2%-2.25%, marking the third hike this year, as was widely expected. The central bank dropped the word "accommodative" from its statement in how it describes its monetary policy. Later, Powell told reporters that the Fed did not see inflation surprising to the upside noting: "It's not in our forecasts."

The comment sent rates lower, along with bank stocks. The 10-year Treasury note yield fell to 3.06%.

Earlier, Fed upped outlook for U.S. economic growth this year from 2.8% to 3.1% and for next year from 2.4% to 2.5%.

US crude fell 1% to $71.57 a barrel and Brent fell 39 cents to $81.48 after U.S. data showed a surprise build in domestic crude inventories.

European markets ended little changed, except 0.6% higher DAX.

AT HOME

After gaining more than half a percent in the opening trade, Sensex and Nifty indices gave away all the gains and more through the session to end lower by 0.3% and 0.1% respectively. Sensex settled at 36542, down 110 points while Nifty lost 14 points to finish at 11053. BSE mid-cap and small-cap indices however gained 0.4% and 0.1% respectively. BSE IT index fell 1.6%, becoming top loser among the sectoral indices, followed by 1.4% lower FMCG and Teck indices. Metal and Realty indices were the top gainers, up 1.7% each.

FIIs net sold stocks worth Rs 810 cr but net bought index futures and stock futures worth Rs 279 cr and 707 cr respectively. DIIs were net buyers to the tune of Rs 1555 cr.

Rupee appreciated 9 paise to end at 72.60/$.

The government has hiked import duty on high-end consumer items including washing machines, air conditioner, footwear, radial car tyre, diamonds, jet fuel as a part of its plan to reduce current account deficit (CAD) and stabilise rupee.

The Union Cabinet also approved the new telecom policy. The telecom policy is focused on increasing high-speed broadband penetration with use of modern technologies like 5G and optical fibres across the country at affordable rates.  Further, the policy also aims to rationalize the spectrum charges. The telecom sector is reeling under a huge debt with interest coverage ratios of some of the telcos such as Bharti Airtel falling below one and rationalizing of spectrum charges could possibly help the telecom operators to keep their debt under check and will help them to participate in the auctions.

Further, the government approved a Rs 45 billion package for the sugar industry. The Cabinet Committee on Economic Affairs (CCEA) approved the food ministry's proposal that seeks to address the surplus domestic stock of sugar and help mills in clearing huge cane arrears of around Rs 130 billion. This is the second financial package to bail out the sugar industry after Rs 85 billion package announced in June.

OUTLOOK

Today morning, Nikkei is up 0.1% while Hang Seng and Shanghai are down 0.3% each. SGX Nifty is suggesting about 20 points higher start for our market.

After rebounding from the vicinity of 10866 bottom made last week on Tuesday, yesterday was a day of consolidation as Nifty, after touching a high of 11145 at the open, eased to end 14 points lower at 11053.

As we have been mentioning, 10866-10750 continues to be important support zone to eye. Also, 11250 continues to be immediate hurdle, a crossover of which is required for a fresh upmove.

NIFTY REBOUNDS FROM THE VICINITY OF 10866-10750 SUPPORT ZONE; 11250 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM THE VICINITY OF 10866-10750 SUPPORT ZONE; 11250 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS

Dow and S & P 500 fell 0.3% and 0.1% respectively while Nasdaq gained 0.2% following the White House's restatement of its tough stance on trade.

Trump, speaking at the United Nations General Assembly, said the U.S. "will no longer tolerate abuse" on trade. Trump's statement came after U.S. Trade Representative Robert Lighthizer said his country was ready to move ahead on a trade deal with Mexico even if it excluded Canada.

The 10-year Treasury note yield climbed to 3.11%. The Federal Open Market Committee begins its two-day monetary policy meeting, with markets expecting the central bank to raise rates by a quarter point.

US consumer confidence rose in September to its highest level in about 18 years.

US crude rose 20 cents to $72.28 while Brent rose 70 cents or nearly a percent to $81.90 a barrel.

European markets climbed 0.7%-1.7% with FTSE on the top.

AT HOME

Benchmark indices ended higher by nearly a percent after wild intraday swings, breaking five-day losing streak. Sensex settled at 36652, up 347 points while Nifty added 100 points to finish at 11067. BSE mid-cap index gained 0.4% but the small-cap index fell 0.7%. BSE Healthcare index and Bankex climbed 1.8% and 1.4% respectively, becoming top gainers among the sectoral indices while Realty index tumbled 1.7%, becoming top loser, followed by 0.9% lower Utilities index.

FIIs net sold stocks and index futures worth Rs 1232 cr and 793 cr respectively but net bought stock futures worth Rs 649 cr. DIIs were net buyers to the tune of Rs 2284 cr.

Rupee depreciated 6 paise to end at 72.69/$.

OUTLOOK

Today morning, Nikkei is off 0.2% but Hang Seng and Shanghai are up 0.7% and 0.3% respectively. SGX Nifty is suggesting about 40 points higher start for our market.

In yesterday's report we had reiterated the view that "10866-10750 is a crucial support zone as 10866, the bottom made on Friday, also coincides with a trendline adjoining bottoms made in December 2016 and March 2018 while 34-week and 200-day moving averages are placed around 10800 and 10750 respectively".

Nifty, after touching a low of 10882, rebounded sharply to end at 11067, holding on to this support zone, and is set to open above 11100 today.

11250, which is the immediate previous bottom on the daily chart, continues to be immediate hurdle to eye, a crossover of which is required for a fresh upmove. 10866-10750 continues to be important support zone.