Dear Trader –
Today’s bloodshed on Dalal Street wiped off Rs
7.56 lakh crore of investor wealth, with the BSE market cap sliding to Rs
311.33 lakh crore.The 30-share BSE benchmark Sensex fell 826 points or 1.26% to
settle at 64,572. The broader NSE Nifty plunged 265 points or 1.36% to end at
19,262.
Here are 4 top reasons for the fall in domestic
headline indices:-
US bond yields – The yield on the
benchmark 10-year US treasury note rose above 5% on Monday, hitting the July
2007 milestone that it briefly attempted to scale last week. The run-up in
yields on the 10-year Treasury bond, seen as a safe-haven in times of economic
uncertainty and a benchmark for borrowing costs around the world, has been
driven by investors pricing in stronger US growth as well as fiscal slippage. The
10-year yield touched 5.004% on Monday, up around 8 basis points (bps) on the
day. It was briefly bid at a 16-year high of 5.001% on Thursday. It has risen
160 basis points since mid-May.
Israel-Hamas
Conflict – Higher risks of broader conflict in the Middle East clouded
market sentiment, sending indices across Asia and Europe lower. On Saturday,
Israel announced its intention to step up its attacks on the Gaza Strip in
preparation for the next stage of its war on Hamas. Israel’s military spokesman
has urged residents of Gaza City to head south in order to ensure their safety.
Oil Continues To
Boil – Even as oil prices slipped on Monday, they continued to
remain above $90 mark. Brent crude futures fell 24 cents, or 0.26%, to $91.92 a
barrel. US West Texas Intermediate crude futures were down 36 cents, or 0.41%,
at $87.72 a barrel.
Nifty futures opened at 19520.00 points against the previous close
of 19527.85 and opened at a low of 19241.15 points. Nifty Future closed with an
average movement of 301.90 points and a decline of around 264.95 and 19262.90 points…!!
At the start of intra-day trading December gold opened at Rs.60400
fell from a high of Rs.60801 points to a low of Rs.60400 with a decline of 11 points,
a trend of around Rs.60725 and December Silver opened at Rs.72645, fell from a
high of Rs.72837 points to a low of Rs.72331 with a decline of 349 points, a
trend of around Rs.72560.
Meanwhile,
Despite the healthy performance of private banks
and marginal reductions in oil prices, investor confidence remained
pessimistic, and a widespread consolidation persisted in the domestic markets.
Increased apprehensions surrounding prolonged elevated interest rates fuelled a
continued upward movement in the US 10-year yield. While a period of
consolidation in the short term seems certain, the extent of this phase will be
shaped by global factors.
Technically,
the important key resistances are placed in October Nifty future are at 19262 levels,
which could offer for the market on the higher side. Sustainability above this
zone would signal opens the door for a directional up move with immediate
resistances seen at 19373 – 19404 levels. Immediate support is placed at 19188 –
19088 levels.
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