RUPEE PLUNGES TO TWO-YEAR LOW; 8410 CONTINUES TO BE IMMEDIATE SUPPORT IN NIFTY
After a negative start, US indices saw a sustained northward move through the session to end with gains of 0.4%-0.9% after the release of positive homebuilder data as investors digested weak manufacturing data and falling oil prices while eyeing the release of the Federal Reserve's minutes.
The National Association of Home Builders index rose 1 point to 61, its highest level since November 2005. The New York Fed said that manufacturing activity for the state fell from 3.86 in July to -14.92 in August, its lowest since April 2009.
Nymex crude settled down 63 cents or 1.5% at $41.87 a barrel, its lowest settlement since March 3, 2009.
European markets ended mixed with FTSE and DAX ending in red while CAC, Italy and Spain gained upto 0.7%. Greece is back in focus as the national parliament votes this week on whether to ratify the bailout deal. German lawmakers are expected to vote on the bailout on Wednesday.
Earlier data showed that Japan's economy shrank at an annualized pace of 1.6% in the April-June period, better than a Reuters' estimate of 1.9% contraction but well below a revised 4.5% expansion in the first three months of 2015.
Sensex and Nifty ended lower by 0.7% and 0.5% respectively after a choppy trading session. Sensex settled at 27878, down 189 points while Nifty lost 41 points to finish at 8477. BSE mid-cap and small-cap indices however gained 0.3% and 0.2% respectively. BSE Metal and Consumer Durable indices climbed 1.3% and 1.1% respectively, becoming top gainers among the sectoral indices while Realty and Capital Goods indices were the top losers, giving away 1.3% and 1% respectively.
FIIs net bought stocks worth Rs 143 cr but net sold index futures and stock futures worth Rs 601 cr and 37 cr respectively. DIIs were net buyers to the tune of Rs 184 cr.
Rupee plunged 31 paise to end at tow-year low of 65.31/$.
Today morning Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 15 points higher start for our market.
We had turned our bias on Nifty positive when 8450-8480 resistance area was crossed and in yesterday's report had asked holding on to trading longs with a stop loss of 8410, which is the 61.8% retracement level of the recent 8338-8530 upmove.
The benchmark, after touching a high of 8531 in the opening trade, slipped to end at 8477.
8410 continues to be immediate support, with the stop loss of which trading longs should be held on to. 8610, where the trendline adjoining recent tops on the daily chart is placed, continues to be immediate target to eye.