Good Morning & Welcome to Thursday's trading action at Dalal Street, dated 29th August 2019.

SGX Nifty in early action is looking wary suggesting that investors need to brace for a volatile & choppy session.


DOW (+258, 26036)

NASDAQ (+30, 7857)

SGX NIFTY (-17, 11031)

NIKKEI (-61, 20418)

HANG SENG (-9, 25606)

BOVESPA (+917, 98193)

OIL (-0.08, $55.70)

GOLD (11, $1548)

USD/INR: 71.83


• FII: - 935.27 Cr

• DII: + 359.32 Cr


Global: Neutral.

FII: Negative.

DII: Positive.

F&O: Neutral.

‪Trend:‬ Neutral.‬‬‬‬‬‬

Sentiment: Negative.‬‬‬



Nifty’s SUPPORT:

Intraday: 10951/10827.

Medium Term: 10637/10201.

Long Term: 8,951.


Intraday: 11157/11201.

Medium Term: 11547/11701.

Long Term: 12,001.

Nifty’s RANGE:

Intraday: 10891-11091.

Medium Term: 10651-11301.

Long Term: 9501-11701.

Nifty’s OUTLOOK:

Intraday: Neutral.

Medium Term: Neutral.

Long Term: Neutral.


The good news this Thursday morning is that in an effort to facilitate foreign investments in India for insurance intermediaries, the Centre has notified 100% Foreign Direct Investment (FDI) in the sector.

The government has also relaxed FDI in single-brand retail trade for companies looking to invest and open retail stores in India.

But honestly speaking, it’s the consistent FIIs selling that are scaring bulls at Dalal Street — again and again.

The big question: Can Dalal Street rise — amidst FIIs selling and moves in the U.S bond market indicating recession fears on backdrop of persistent U.S-China trade tensions.

Well, our call of the day suggests that the benchmark Nifty will be unable to defend any intraday comeback.

We say so because weighing on sentiments will be the consistent FIIs selling in the month of August as they have sold shares worth Rs. 15,005 crores. FIIs were net sellers in yesterday’s trading session too as they sold shares worth Rs. 935 crores.

Technically, Nifty’s immediate hurdles at 11,201 mark. Traders are advised to establish aggressive long positions only on any close above Nifty 11,201. Until Nifty clears 11,201 mark brace yourself for choppy water. Nifty’s immediate support seen at 10837 and then at 10637 mark.

Below 10637 mark on Nifty, it is safe to assume that "All the kings horses and all the kings men unlikely to put back Nifty together again".

Caution warranted amidst:

1. Implications of falling U.S bond yields. There is chaos and ambiguity whether the U.S inversion of the yield curve is a bad omen for global economy. The 10-year yield fell below the 2-year yield for the first time since June 2007 — underlining investor worries over a potential recession.

2. Investors’ hopes for a resolution to the U.S.-China trade dispute are fading.

3. Potentially adding to fears of slowing global economic growth was U.K. Prime Minister Boris Johnson’s plan to suspend parliament until Oct 14th. The move was seen as increasing the chances of a “no-deal” Brexit that economists estimate could deal a significant blow to economic growth in the U.K and Europe.

Long story short: Dalal Street needs to see significant buying before investors' jump into buying a rally. Until then, it's safe to assume that it's just a dead can bounce.

Meanwhile, volatility likely to be hallmark of today's trade amidst expiry of August futures & options contracts.

Amongst stock specific news, Nestle India to be included in NSE Nifty 50 Index. Nestle will be replacing Indiabulls Housing Finance. Changes effective from 27 September.

Outlook for Thursday: Volatile session likely. Stock specific activity will command attention.

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