PRUDENT MORNING MANTRA - 12/09/2013

BROADER MARKET RALLIES WHILE NIFTY TAKES A PAUSE; IIP, CPI IN FOCUS TODAY

WORLD MARKETS

After a flat to negative start, US indices saw a sustained northward move through the session to end mixed with Dow and S & P rising 0.9% and 0.3% respectively while Nasdaq, dragged down by Apple, lost 0.1%.

Apple fell 5.4%, registering biggest decline since April, on concerns that its lower-priced iPhone would prove too pricey to succeed in emerging markets.

President Barack Obama’s decision to delay military action against Syria eased concerns, yet the issue remained on the back burner.

European markets ended flat to modestly higher , with the Stoxx Europe 600 index closing at the highest level since June 2008.

AT HOME

After a heady run-up of previous four sessions, yesterday was a day of consolidation as benchmark indices, after a rangebound but volatile trading session, ended little changed. Sensex in fact closed absolutely flat at 19997 while Nifty gained 16 points to settle at 5913. Broader market however outperformed significantly, as depicted by 1.3% and 1.1% rise in BSE mid-cap and small-cap indices respectively. BSE Metal and Realty indices gained the most among the sectoral indices, rising 3.3% and 2.7% respectively while FMCG and Consumer Durable indices were the top losers, down 1.1% and 0.6% respectively.

FIIs net bought stocks worth Rs. 586 cr but net sold index futures and stock futures worth Rs. 273 cr and 315 cr respectively. DIIs were net sellers to the tune of Rs. 386 cr.

Rupee appreciated for the fifth consecutive day to close at 63.38/$, the previous close being 63.84.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting a marginally higher start for our market.

As mentioned in yesterday's report, 6000, where the trendline adjoining two major tops on the weekly chart is placed, continues to be the next target. 5832, the low made yesterday, is the immediate support below which 5738-5688, the gap created by Tuesday's gap up opening, would be the next support zone. Traders are advised to trail stop loss in long positions to 5832 and book profit as 6000 approaches.

India's IIP for the month of July would be released today and is expected to show a contraction of 0.2% as against degrowth of 2.25% seen in June.

CPI for August would also come out today and is expected to ease a bit to 9.6% from 9.64% in July.