Good Morning & Welcome to Monday's trading action at Dalal Street, dated 26th August 2019.

SGX Nifty indicating a positive start for our stock markets despite deepening U.S.-China trade war. The big question: Can Dalal Street handle the uncertainty?

7 AM GLOBAL UPDATE:

DOW (-623, 25628)

NASDAQ (-240, 7751)

SGX NIFTY (+55, 10884)

NIKKEI (-481, 20230)

HANG SENG (-857, 25322)

BOVESPA (-2343, 97667)

OIL (-0.83, $53.34)

GOLD (+19, $1556)

USD/INR: 71.51

INSTITUTIONS:

FII: - 1737.20 Cr

DII: + 1548.49 Cr

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Negative.

FII: Negative.

DII: Positive.

F&O: Negative.

‪Trend:‬ Down.‬‬

Sentiment: Negative.‬‬‬

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,829.

Nifty’s SUPPORT:

Intraday: 10741/10637.

Medium Term: 10001, 9750.

Long Term: 8,951.

Nifty’s RESISTANCE:

Intraday: 10901/11007.

Medium Term: 11189/11501.

Long Term: 12,001.

Nifty’s RANGE:

Intraday: 10745-10945.

Medium Term: 10201-11301.

Long Term: 9501-11701.

Nifty’s OUTLOOK:

Intraday: Negative.

Medium Term: Neutral.

Long Term: Neutral.

IMPORTANT THEMES FOR THE DAY:

Dalal Street likely to jump with joy after Finance Minister Nirmala Sitharaman on Friday announced a string of measures to revive a flagging economy.

Expect sentiments at Dalal Street to gap-up in Monday’s trade as the street will be relieved after the enhanced surcharge on FPIs has been withdrawn. The government has also decided to withdraw enhanced surcharge levied on long and short-term capital gains.

But despite positive action taken at home, Dalal Street will spy with one big eye on the escalating developments on the trade war front between two of the world’s largest economies.

Well, U.S-China tensions are seen reaching a boiling point, and that brings us to the big question of the day — Can Dalal Street stand the heat??

Intensifying U.S.-China trade war is likely to be the key negative catalyst haunting trading sentiments and keeping upside capped at our stock markets. Donald Trump escalated his attacks on China on Friday, bumping up tariffs on Chinese imports and ordering US companies to leave China. The move came hours after the president hit out at Chinese plans to hit $75bn (£61bn) of US goods with duties.

That brings us to our call of the day which suggests investors will keep one eye on cheery FM’s action and the other on intensifying U.S.-China trade war.

Meanwhile, the technical landscape continues to be bearish as the indices are still seen correcting from overbought technical conditions. The immediate downside risk continues to be at 10,637 mark.

Please note, confirmation of major weakness only below 10,637 mark, targeting October 2019 low at 10,004 mark.

The key interweek hurdles to watch on Nifty are at 11,197 mark. Aggressive buying advised only if Nifty is able to move above 11,197 mark.

Long story short: The bear has got the whole market in his stride.

Blame it to FIIs selling as in the month of August, FIIs have sold shares worth Rs. 12,393 crores. FIIs were net sellers in Friday’s trading session as they sold shares worth Rs. 1737.20 crores.

Also please that again and again, the U.S bond market is signalling a recession. The closely watched 2-year Treasury note rate rose above its longer-term counterpart in the 10-year Treasury not, representing an inversion of the bond-market yield curve. Yields have clearly inverted and that makes perma-bull investors increasingly anxious as the said gauge has preceded the past seven recessions.

Outlook for Monday: Sell on any excessive strength.

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