9830 NEXT SUPPORT; 9988 IMMEDIATE HURDLE

9830 NEXT SUPPORT; 9988 IMMEDIATE HURDLE

WORLD MARKETS                             

US markets were shut yesterday for Labor Day.

European markets fell 0.3%-0.8% after North Korea conducted its sixth and most powerful nuclear test to date on Sunday.

In response, South Korea carried out a live-fire exercise simulating an attack on North Korea. It came as U.S. Defense Secretary James Mattis warned that any threat from North Korea towards the U.S. or its allies would be met with a "massive military response."

The Japanese yen, gold, spot silver and sovereign bonds rose on safe haven buying. Gold climbed to a high of $1337 an ounce, it's highest in almost a year.

AT HOME

After falling more than a percent in the morning session on the back of geopolitical worries, benchmark indices recouped nearly half of the losses in the noon trade to end lower by six tenth of a percent. Sensex lost 190 points to settle at 31702 while Nifty finished at 9913, down 62 points. BSE mid-cap and small-cap indices fell 0.7% each.

Except a 0.3% higher Metal index, all the BSE sectoral indices ended in red with Realty and Telecom indices leading the losses, down 1.4% and 1.3% respectively.

FIIs net sold stocks and index futures worth Rs 874 cr and 470 cr respectively but net bought stock futures worth Rs 214 cr. DIIs were net sellers to the tune of Rs 49 cr.

Rupee depreciated 2 paise to end at 64.05/$.

The Brics declaration bracketed Pakistan-based Lashkar-e-Taiba and Jaish-e-Mohammed with global terror groups Islamic State and al-Qaeda, marking a significant diplomatic win in India’s efforts to counter cross-border terrorism.

OUTLOOK

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

In yesterday's report we had mentioned that 9890 is the immediate support on the hourly chart, with the stop-loss of which trading longs should be held on to.

Nifty broke this support and plunged all the way to 9861 but recovered to end at 9913.

A trendline adjoining bottoms made in August is placed around 9830 and that is the next important support to eye. Below 9830, 9685, the bottom made in August, would be the next crucial support.

On the way up, 9988, the top made yesterday, is the immediate hurdle, upon crossover of which, 10138 would be the next upside target.