PRUDENT MORNING MANTRA - 08.09.2014

BROADER MARKET OUTPERFORMS WHILE NIFTY CONSOLIDATES; STAY LONG WITH THE STOP LOSS OF 8010

WORLD MARKETS

US indices, after dipping in the initial trade on Friday, saw a sustained upmove through rest of the session to end with gains in the vicinity of half a percent, with the S & P 500 closing at fresh all-time high.

Initial dip was on account of disappointing nonfarm payroll report which showed an addition of just 142000 jobs in August as against expectation of 225000, even as the jobless rate declined to 6.1%. At the same time disappointing jobs tally calmed concerns about the Federal Reserve removing stimulus sooner rather than later, with the Fed measuring the health of the jobs market as it tapers bond purchases and mulls the timing of interest-rate hikes.

Boston Federal Reserve Bank President bolstered that view, saying in prepared remarks that the Fed should be patient in cutting stimulus given the "significant" slack in the labor market.

Ukraine and pro-Russian separatists agreed to a truce after months of bloodshed as U.S. and European officials considered further sanctions against Russia for its part in the conflict.

European markets ended mixed with modest changes.

Nymex crude fell 1.3% to $93.3 a barrel.

For the week, Dow and S & P 500 gained 0.2% each while Nasdaq rose 0.1%. European markets saw big gains ranging from 2.4%-4.6%.

                                                             

AT HOME

It was yet another day of consolidation as benchmark indices, after a positive start, could not sustain initial gains and closed modestly lower. Sensex lost 59 points to settle at 27027 while Nifty finished at 8087, down 9 points. BSE mid-cap and small-cap indices however gained 0.6% and 1.2% respectively. BSE Realty and Capital Goods indices gained the most among the sectoral indices, rising 1.2% and 0.9% respectively. Auto and FMCG indices lost 0.6% and 0.3% respectively.

FIIs net bought stocks worth Rs 311 cr but net sold index futures and stock futures worth Rs 594 cr and 631 cr. DIIs were net sellers to the tune of Rs 355 cr.

Rupee depreciated 4 paise to close at 60.39/$.

OUTLOOK

China has reported a record trade surplus of $49.9 bn for August as exports have climbed 9.4% as against expectation of a rise of 8% whereas imports are down 2.4% versus an expectation of a  1.7% rise.

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher opening for our market.

After nearly  achieving the first mega target of 8150 on Wednesday, Nifty has been in a consolidation mode for last two sessions.

Immediate support on the hourly chart continues to be around 8010, with the stop loss of which trading longs can be held on to. On the way up, upon crossover of the 8142, which was the top made last week, 8250 would be the next target to eye.