NIFTY RESISTED NEAR 10138 AS EXPECTED; IMMEDIATE SUPPORT MOVES UP TO 9920

NIFTY RESISTED NEAR 10138 AS EXPECTED; IMMEDIATE SUPPORT MOVES UP TO 9920

WORLD MARKETS                             

US indices gained 0.1%-0.2%, notching fresh record highs, as a gain in the energy sector offset losses in tech.

Brent crude rose 89 cents to $55.16 a barrel and U.S. crude added $1.07 to settle at a five-week high of $49.30 after the International Energy Agency said the oversupply of crude was beginning to shrink.

President Trump tweeted that "the biggest Tax Cut & Tax Reform package in the history of our country will soon begin. Move fast Congress!"

Optimism over tax reform led to yields of the 10-year U.S. Treasury note rising to 2.19%. Dollar index rose about half a percent to 92.40.

U.S. producer prices rose 0.2% in August, which was lower-than-expected.

European markets, except a 0.3% lower FTSE, ended flat to modestly higher.

AT HOME

After gaining about four tenth of a percent, benchmark indices gave away all the gains in the late noon plunge to end flat to marginally lower. Sensex settled at 32186, up 28 points while Nifty lost 14 points to finish at 10079. BSE mid-cap and small-cap indices lost 0.7% and 0.6% respectively. BSE Oil & Gas and Metal indices plunged 1.7% and 1.1% respectively, becoming top losers among the sectoral indices while Healthcare index soared 1.2%, becoming top gainer, followed by 0.2% higher Energy index.

FIIs net sold stocks and index futures worth Rs 827 cr and 532 cr respectively but net bought stock futures worth Rs 63 cr. DIIs were net buyers to the tune of Rs 726 cr.

Rupee ended at 63.99/$, appreciating 3 paise compared to previous close.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Readers would recall that after Nifty crossed the immediate hurdle of 9980-10000, we were working with target of 10138, the highest high so far made on 2nd August. In yesterday's report we had also said that some profit booking in trading longs is advisable as 10138 approaches.

Yesterday, Nifty, after touching a high of 10132, slipped to end at 10079, vindicating our view.

A decisive crossover of 10138 is required for a fresh upmove. An upside till about 10600 would open up if that happens.

The upward sloping trendline adjoining recent bottoms on the daily chart, which also coincides with 20-DMA, has now moved up to 9920, which should serve as stop-loss for remaining long positions.

August WPI will be out today and is expected to show a reading of 3.07%, up from 1.88% in July.

NIFTY ACHIEVES 10088 TARGET; 10138 NEXT

NIFTY ACHIEVES 10088 TARGET; 10138 NEXT

WORLD MARKETS                             

US indices gained about a third of a percent to close at record high following comments about tax reform.

Treasury Secretary Mnuchin said he was "hopeful" that tax reform would be accomplished by year's end, adding the administration is thinking about backdating reform to Jan. 1.

Financial stocks surged after the benchmark 10-year Treasury yield rose to 2.171%, its highest level since Sept. 1.

European markets, except a 0.2% lower FTSE, gained 0.1%-0.6%. FTSE fell and Pound firmed after U.K. August inflation rose 2.9% y-o-y, a tad higher than the 2.8% forecast. The figures will add renewed pressure to the Bank of England, which will meet Thursday to make its latest monetary policy decision.

AT HOME

Benchmark indices surged nine tenth of a percent with Sensex and Nifty closing at the highest level since 7th August and 1st August respectively. Sensex soared 276 points to settle at 32159 while Nifty finished at 10093, up 87 points. BSE mid-cap and small-cap indices climbed 1.1% and 1% respectively. All the BSE sectoral indices ended in green with Realty and Healthcare indices leading the tally, up 2.1% and 1.7% respectively.

FIIs net sold stocks and index futures worth Rs 1231 cr and 299 cr respectively but net bought stock futures worth Rs 211 cr. DIIs were net buyers to the tune of Rs 1313 cr.

Rupee depreciated 11 paise to end at 64.04/$.

India's retail inflation, measured by Consumer Price Index (CPI) grew 3.36% in August, up from 2.36% in July. Core CPI stood at 4.5%, up from 3.96%. Factory output measured in terms of index of industrial production grew 1.2% in July as against a contraction of 0.2% in June.

OUTLOOK

Today morning, Asian markets, except a half a percent higher Nikkei, are trading with modest cuts and SGX Nifty is suggesting a marginally higher start for our market.

After Nifty took out the immediate hurdle of 10000, we had said that 10088 and 10138, the tops made on 7th and 2nd August respectively, are the upside targets to eye.

The benchmark surged to touch a high of 10097 before closing at 10093, achieving the 10088 target.

10138, the highest high so far made on 1st August, continues to be next major target as well as the hurdle to eye.

The support in the form of 20-DMA and rising trendline adjoining recent bottoms on the daily chart has now moved up to 9900, with the stop-loss of which, trading longs should be held on to. Some profit booking is advisable as the 10138 approaches.

10088, 10138 ARE THE UPSIDE TARGETS; 9880 IMMEDIATE SUPPORT

10088, 10138 ARE THE UPSIDE TARGETS; 9880 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices soared 1.1%-1.2% yesterday, with the S & P 500 at record close, as concerns over Irma and North Korea ebbed.

Hurricane Irma, originally a Category 5 hurricane, was downgraded to a tropical storm as it moved inland and the damage caused by it was less than originally thought.

Markets were also relieved after there was no further missile test by North Korea over the weekend. The United Nations Security Council voted to increase sanctions against North Korea yesterday which included a limit on the amount of crude oil imported by the country.

Dollar rose while Gold and US treasury sold-off on these developments. Dollar index rose about half a percent to 91.90 and yields of the 10-year U.S. Treasury note rose 8 basis points to 2.13% after falling to their lowest levels since November last week. Gold fell 1.2% to $1336 per ounce.

U.S. crude jumped 1.2% to settle at $48.07 a barrel while Brent rose 0.1% to $53.84 a barrel as refineries on the U.S. Gulf Coast began to resume operations after a shutdown due to Hurricane Harvey.

European markets gained 0.5%-1.9%. Insurance stocks led the gains after the projected insured loss in the U.S. resulting from Hurricane Irma was cut to between $20 billion and $40 billion.

AT HOME

After climbing just under a percent, benchmark indices cooled off in last half an hour to end higher by about seven tenth of a percent. Sensex added 195 points to settle at 31882 while Nifty finished at 10006, up 71 points. BSE mid-cap and small-cap indices gained 0.7% and 0.8% respectively. BSE Capital Goods and Power indices added 2.6% and 1.9% respectively, becoming top gainers among the sectoral indices while IT and Teck indices were the top losers, down 0.1% each.

FIIs net sold stocks and index futures worth Rs 393 cr and 247 cr respectively but net bought stock futures worth Rs 165 cr. DIIs were net buyers to the tunes of Rs 877 cr.

Rupee depreciated 15 paise to end at 63.93/$.

Indusind Bank surged after the company entered into an exclusivity agreement with Bharat Financial to evaluate possibility of a strategic deal between the two.

OUTLOOK

Today morning, Asian markets are trading with gains of upto a percent with Nikkei on the top and SGX Nifty is suggesting about 40 points higher start for our market.

In yesterday's report we had mentioned that an upward sloping trendline adjoining tops made in mid-August and early September presents a resistance around 10000, above which 10088 and 10138 would be next upside targets to eye.

The benchmark touched a high of 10028 before closing at 10006. 10088 followed by 10138, the tops made in early August, are the next upside targets to eye.

The upward sloping trendline adjoining recent bottoms on the daily chart, which also coincides with 20-DMA, is now placed around 9880 and is the immediate support with the stop-loss of which, existing longs should be held on to.

July IIP will be released today and is expected to show a growth of 1.3% as against contraction of 0.1% in June. August CPI is expected to rise to 4.26% from 2.36% in July.

10000 IS THE UPSIDE HURDLE; 9860 IMMEDIATE SUPPORT

10000 IS THE UPSIDE HURDLE; 9860 IMMEDIATE SUPPORT

WORLD MARKETS                             

While Dow gained 0.1%, S & P 500 and Nasdaq fell 0.2% and 0.6% respectively on Friday with energy and information technology contributing the largest losses.

Hurricane Irma was downgraded from a category 5 to a category 4 early on Friday, but the head of the Federal Emergency Management Agency (FEMA) warned that the storm will "devastate" parts of the country

Wholesale inventories rose 0.6% in July, more than 0.4% expected and nearly matching its biggest gain in six months recorded in June.

European markets ended mixed with modest changes. Basic resources stocks fell, as metal prices like copper, nickel and lead all posted sharp losses. Miners were under pressure following softer-than-expected export data from China.

For the week, US indices fell 0.6%-1.2%. In Europe FTSE and CAC fell 0.8% and 0.2% respectively but DAX gained 1.3%. In Asia, Shanghai gained 0.2% but Nikkei plunged 2.2% and Hng Seng fell 1%.

China August producer price inflation rose 6.3% y-o-y, above July's 5.5% level and beating the 5.6% forecast.

News reports over the weeked suggested the European Central Bank is weighing an option to to reduce its bond-buying to 20 billion euros or 40 billion euros a month from the current 60 billion euros.

China's central bank intends to remove requirements for financial institutions to set aside foreign-exchange risk reserves for trading yuan forwards.

AT HOME

After rising about a third of a percent in the initial trade, benchmark indices gave away most of the gains through the choppy session to end just marginally higher. Sensex settled at 31688, up 25 points while Nifty added 5 points to finish at 9935. BSE mid-cap and small-cap indices lost 0.4% and 0.1% respectively. BSE Capital Goods index surged 1.9%, becoming top gainer among the sectoral indices, followed by 0.7% higher Industrial index. Realty index was the top loser, down 1.5%, followed by 0.9% lower Healthcare and Power indices.

M & M plunged 3.4% ahead of tomorrow's GST Council meet, which is expected to consider cess hike on SUVs and luxury cars.

Dr Reddy tumbled 2.9% after its Duvvada facility received six major observations from German health regulator.

FIIs net sold stocks and stock futures worth Rs 256 cr and 61 cr respectively but net bought index futures worth Rs 119 cr. DIIs were net buyers to the tune of Rs 488 cr.

Rupee appreciated 26 paise to end at 63.79/$, an over one-month high.

For the week, Sensex and Nifty lost 0.6% and 0.4% respectively.

GST Council on Saturday raised the cess on mid-sized to large cars and SUVs in the range of 2-7 percentage points but kept the tax burden lower than pre-GST levels. The council also reduced the GST rate on about 30 commonly used products.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-1.5% and SGX Nifty is suggesting about 30 points higher start for our market.

As we have been mentioning, Nifty is in a consolidation mode after hitting a low of 9685 on 11th August. An upward sloping trendline adjoining recent bottoms on the daily chart is placed around 9860, which also coincides with 20-DMA, making 9860 an important immediate support.

On the way up, an upward sloping trendline adjoining tops made in mid-August and early September presents a resistance around 10000, making it an immediate hurdle. Above 10000, 10088 and 10138 would be next upside targets to eye.

CONSOLIDATION CONTINUES; 9988-9860 IS THE IMMEDIATE RANGE

CONSOLIDATION CONTINUES; 9988-9860 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

US indices ended mixed with modest changes

Financials fell as the yield on the U.S. 10-year Treasury note slipped to to 2.05%.

The Senate approved a package that includes Hurricane Harvey recovery funds, a debt ceiling extension and temporary government funding.

Initial claims for state unemployment benefits soared by 62,000 to a seasonally adjusted 298,000 for the week ended Sept. 2, the highest level since April 2015

The European Central Bank held interest rates steady at 0 percent. ECB President Draghi hinted at starting to reduce the central bank's bond-buying program as early as next month. Draghi also gave an upbeat forecast on the region's economy.

In reaction, the euro spiked to $1.204 against the dollar.The dollar index hit low of 91.405, its lowest level since Jan. 6, 2015.

Brent crude rose 29 cents to $54.49 a barrel and WTI crude shed 7 cents to settle at $49.09 due to a larger-than-expected build in U.S. inventories.

European markets, except 0.4% lower Italy, gained 0.3%-0.7%.

AT HOME

After rising about half a percent in the initial trade, benchmark indices gave away most of the gains through the choppy session to end flat to marginally higher. Sensex settled at 31663, up 1 point while Nifty added 19 points to finish at 9935. BSE mid-cap and small-cap indices gained 0.8% and 0.5% respectively. BSE Metal and Auto indices climbed 1.4% and 0.8% respectively, becoming top gainers among the sectoral indices while Telecom and Energy indices were the top losers, down 0.8% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 564 cr, 107 cr and 275 cr respectively. DIIs were net buyers to the tune of Rs 245 cr.

Rupee appreciated 5 paise to end at 64.05/$.

OUTLOOK

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 15 points higher start for our market.

As we have been mentioning, Nifty is in a consolidation mode after testing a low of 9685 on 11th August. The range of this consolidation is getting narrower as the upward sloping trendline adjoining recent bottoms made on daily chart is now placed around 9860, which also coincides with the bottom made on Monday. 9988, the top made on Monday, continues to be immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 10138, the top made in August, would be the next target to eye.

TRENDLINE SUPPORT RISES TO 9850; 9988 CONTINUES TO BE IMMEDIATE HURDLE

TRENDLINE SUPPORT RISES TO 9850; 9988 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices gained 0.2%-0.3% after two top Democratic leaders said President Trump would support a debt ceiling extension and government funding plan.

Trump broke with his party to support a package that included a short-term debt ceiling extension. If Congress passes the package, which also includes relief funding for Hurricane Harvey, it would prevent a default on the federal debt. However, House Speaker Paul Ryan, a Republican, said the Democrats' proposal is "ridiculous" and "unworkable."

U.S. trade deficit for July came in at $43.7 billion, below the expected $44.7 billion. The IHS Markit PMI for August hit 56.0 and the ISM non-manufacturing index was in line with expectations.

The Federal Reserve's Beige Book found that the U.S. economy expanded at a modest to moderate pace in July through mid-August but signs of an acceleration in inflation remained slight.

European markets, except a 0.2% lower FTSE, gained 0.3%-0.8%.

AT HOME

After falling about seven tenth of a percent in the initial trade, benchmark indices recouped nearly half of the losses through the session to end lower by nearly four tenth of a percent. Sensex settled at 31662, down 148 points while Nifty lost 36 points to finish at 9916. BSE mid-cap and small-cap indices gained 0.2% and 0.4% respectively. BSE Healthcare and FMCG indices tumbled 1.4% and 1.1% respectively, becoming top losers among the sectoral indices while Metal and Basic Material indices were the top gainers, up 0.7% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 1353 cr and 763 cr respectively but net bought stock futures worth Rs 507 cr. DIIs were net buyers to the tune of Rs 52 cr.

Rupee appreciated 2 paise to end at 64.10/$.

OUTLOOK

Today morning, except a marginally lower Shanghai, other Asian markets are trading with gains of 0.4%-1% and SGX Nifty is suggesting about 35 points higher start for our market.

Nifty has been in a consolidation mode after hitting a low of 9685 on August 11. As we have been mentioning, an upward sloping trendline adjoining recent bottoms on daily chart is the immediate support to eye. The same is currently placed around 9850 which makes 9850 an important immediate support upon breach of which Nifty might retest 9685 bottom. On the other hand 9988, the top made on Monday, is the immediate hurdle above which 10138, the top made in August, would be the next resistance.

ECB's monthly policy review is due today where Mario Draghi is set to start laying the groundwork for stimulus reduction. The ECB is widely expected to bump up its 2018 growth forecasts on Thursday in what could be the fourth consecutive quarterly upgrade of the projection.

9988 CONTINUES TO BE IMMEDIATE HURDLE; 9840 IMMEDIATE SUPPORT

9988 CONTINUES TO BE IMMEDIATE HURDLE; 9840 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices plunged 0.8%-1.1% on geopolitical worries related to North Korea.

In an emergency UN meeting held on Monday, US urged the 15-member Security Council to respond with the "strongest  possible measures" against North Korea.

A North Korean diplomat threatened that the country was prepared to deliver "gift packages" to the U.S. if the latter continues to put pressure on it. South Korea has said further missile tests could be expected from North Korea following its last nuclear test on Sunday.

Also, Trump yesterday tweeted that he would be letting Japan and South Korea purchase a "substantially increased amount" of military equipment from the U.S. Meanwhile, Russian President Vladimir Putin cautioned over increasing "military hysteria" in reaction to developments in the region.

Gold rose 1.1% to $1,344.50 per ounce, around a one-year high. The yen gained 0.9% against the dollar to 108.82. US 10-year treasury yield stood at 2.06%, its lowest since November.

European markets, except a 0.2% higher DAX, fell 0.2%-0.6%

AT HOME

Benchmark indices ended higher by four tenth of a percent after a choppy session. Sensex added 107 points to settle at 31810 while Nifty finished at 9952, up 39 points. BSE mid-cap and small-cap indices climbed 0.6% and 1% respectively. Except a 1.6% lower Telecom index, all the BSE sectoral indices ended in green with Consumer Durable and Realty indices leading the tally, up 2.3% and 1.6% respectively.

Bharti Airtel plunged 2.5% on reports that the Telecom Regulatory Authority of India (TRAI) might soon release guidelines to phase out Interconnection Usage Charge (IUC), the charge companies pay their peers for using their network to complete calls and/or other services.

FIIs net sold stocks worth Rs 379 cr but net bought index futures and stock futures worth Rs 80 cr and 33 cr respectively. DIIs were net buyers to the tune of Rs 474 cr.

Rupee depreciated 7 paise to end at 64.12/$.

The government yesterday said that names of over 2.09 lakh firms have been struck off from register of companies for failing to comply with regulatory requirements and action has been initiated to restrict operations of their bank accounts.

India's Nikkei/IHS Markit Services PMI for August rose to 47.5, up from July's 45.9 but still below the 50 mark that separates expansion from contraction. A composite PMI, which takes into account both manufacturing and services activity, was up from July's 46.0 but remained in contraction territory at 49.0

OUTLOOK

Today morning, Asian markets are trading with cuts of 0.2%-0.4% and SGX Nifty is suggesting about 30 points lower start for our market.

Yesterday, after touching a high of 9963, Nifty closed at 9952, a gain of 39 points compared to previous daily close. 9988, the top made on Monday, continues to be immediate hurdle above which 10138, the top made in August, would be the next major hurdle to eye.

Trendline adjoining recent bottoms on the daily chart has now moved up to 9840, which makes it immediate support below which 9685, the bottom made in August, would be the crucial support to eye.