IIP SURPRISES ON THE WAY UP; CPI EASES FOR THE SECOND MONTH
US indices lost upto 0.4% yesterday, halting a seven-day win streak for the S&P 500 Index, as markets worried about developments related to Syria and Federal Reserve policy moves.
U.S. Secretary of State John Kerry arrived in Geneva on Thursday for discussions with Russia’s foreign minister on a proposed plan under which Syria will turn over its chemical weapons to the international community.
Separately, Syria’s President Bashar al-Assad said the U.S. needs to give up “its policy of threats” and stop shipping arms to Syrian rebels before his government surrenders its chemical weapons
First-time claims for unemployment benefits declined by 31,000 to 292,000 in the week ending Sept. 7, marking the lowest level since April 2006, but processing glitches involving two states clouded the reading, the Labor Department reported.
European markets ended flat to modestly lower as the region’s industrial output contracted more than forecast. Factory production in the region fell 1.5% from June, more than the 0.3% contraction forecast by economists.
Gold slid $33.20, or 2.4%, to $1,330.60 an ounce, while crude-oil added $1.04 to end at $108.60 a barrel
Profit booking set in after a heady run-up as benchmark indices, after a flattish start, saw a sustained downward move through the trading session to end lower by 1%. Sensex slipped 215 points to settle at 19781 while Nifty shut shop at 5850, down 62 points. BSE mid-cap index ended flat while the small-cap index gained 0.2%. Except 0.5% and 0.3% rise in BSE Realty and FMCG indices respectively, all other sectoral indices ended in red, with Metal index and Bankex leading the tally, giving away 2.5% and 1.9% respectively.
Rupee too retreated after five consecutive strong days to close at 63.50, the previous close being 63.38.
FIIs net bought stocks worth Rs. 931 cr but net sold index futures and stock futures worth Rs. 344 cr and 310 cr respectively. DIIs were net sellers to the tune of Rs. 395 cr.
Today morning, Asian markets are trading flat to modestly lower while SGX Nifty is suggesting a flattish start for our market.
India's industrial output, after contracting for two consecutive months, grew at a four-month high of 2.6% in July against contraction of 0.1% in same month last year. Manufacturing, which constitutes over 75% of the index, grew at 3% this month compared to stagnation in July last year. The big surprise came from capital goods sector which rebounded by a robust 15.6% against a decline of 5.8% last July. Electricity grew at 5.2% v/s 2.8%.
CPI eased marginally in Aug to 9.52% in line with expectations from 9.64% in July, Food prices for consumers eased to 11.06% in Aug vs 11.24% in July.
6000, the level emnating from the downward sloping trendline adjoining 6230 and 6093, the tops made in May and July respectively, continues to be the immediate hurdle to watch on the way up. In yesterday's report we had mentioned that 5832, the low made Wednesday, is the immediate support. The benchmark, after touching a low of 5815, recovered to close at 5850. Next line of support below 5815 would come in the 5738-5688 region, which is the gap created by the gap up opening on Tuesday.
Economic data to watch today include retail sales, producer prices and consumer sentiment from the US.