NIFTY REBOUNDS FROM TRENDLINE SUPPORT; 8038 IS THE IMMEDIATE RESISTANCE

NIFTY REBOUNDS FROM TRENDLINE SUPPORT; 8038 IS THE IMMEDIATE RESISTANCE

WORLD MARKETS                             

US indices soared nearly a percent on Friday, rebounding from heavy losses suffered on Thursday, after the government raised its estimate of economic growth in the second quarter and consumer sentiment rose in September.

Data from the Commerce Department had GDP increasing at a revised 4.6% annualized rate, up from the prior estimate of 4.2%, and in line with expectations. The Thomson Reuters/University of Michigan's final read on consumer sentiment climbed to 84.6 in September from 82.5 the month before.

European markets, except a 0.2% cut in DAX, gained between 0.1%-1.9%.  DAX was dragged down by a sharp drop for the insurance company Allianz following the news that legendary bond guru Bill Gross was leaving as chief investment officer of Pimco, which Allianz owns.

Nymex crude rose $1.01 to $93.5 a barrel; Gold fell $6.5 to $1215 an ounce.

For the week, US indices lost between 1%-1.5%. European markets lost anywhere between 0.8%-3.2%.

AT HOME

After falling nearly a percent in the morning trade, benchmark indices saw mammoth rebound in the noon trade on the back of S & P outlook change and finally ended higher by about two third of a percent. Sensex gained 158 points to settle at 26626 while Nifty finished at 7969, up 57 points. BSE mid-cap and small-cap indices gained 0.8% and 0.6% respectively. BSE Metal and Realty indices gained 2.5% and 2.3% respectively, becoming top gainers among the sectoral indices while Teck and IT indices lost 0.6% and 0.5% respectively.

In a huge sentiment booster for India, rating agency S&P revised India's credit outlook to 'stable' from 'negative' saying Modi government's "strong" mandate would allow it to implement fiscal and economic reforms.

FIIs net sold stocks, index futures and stock futures worth Rs 1134 cr, 213 cr and 1004 cr respectively. DIIs were net buyers to the tune of Rs 1335 cr.

Rupee ended at 61.14/$, appreciating 20 paise compared to previous close and breaking four-day losing streak.

The government has released its borrowing calender for the second half of this fiscal. The Centre will borrow Rs 2.4 lakh crore against the Budget estimates of Rs 2.48 lakh crore, which is pretty much on target.

SEBI on Friday notified the regulations on real estate and infrastructure investment trusts-REIT and InvIT. The move enables the cash-strapped real estate and infrastructure sectors raise capital by liquidating their assets through these globally-popular financial instruments.

OUTLOOK

Today morning Asian markets, except Nikkei, are trading with modest cuts and SGX Nifty is suggesting about 30 points lower opening for our market.

On Friday, after touching a low of 7842, Nifty rebounded sharply to close at. That was justified as in the vicinity of 7840 lies a big trendline support emanating from adjoining bottoms made in May and August.

Near term trend however, will turn bullish only after the resumption of the higher-top higher-bottom formation on the daily chart. 8038, the 61.8% retracement level of the recent 8160-7842 fall, would be the immediate resistance to eye. Till that is taken out, any rebound should be taken with a pinch of salt.