7667 CONTINUES TO BE CRUCIAL SUPPORT; 7915 IMMEDIATE HURDLE

7667 CONTINUES TO BE CRUCIAL SUPPORT; 7915 IMMEDIATE HURDLE

WORLD MARKETS                             

Dow and S & P 500 climbed 1.8% each while Nasdaq soared 2.5% yesterday , after equity markets in China yesterday ended almost flat on the back of fresh supportive measures from brokerage houses.

Nymex oil, after falling as much as 4% to below $44 a barrel on the back of U.S. Energy Information Administration's weekly report showing rise in oil inventories, recovered to settle up 1.9% at $46.25 a barrel.

Federal Reserve's latest Beige Book said economic activity continued to expand.

European markets, except a half a percent lower Spain, closed 0.3%-0.8% higher.

AT HOME

After a gap up opening of nearly a percent, benchmark indices nosedived nearly 2% from the top of the day to end lower by nearly a percent, extending the losing streak to third straight day and closing at the lowest level since August 2014. Sensex slumped 243 points to settle at 25454 while Nifty finished at 7717, down 69 points. BSE mid-cap index lost 0.8% but the small-cap index gained 0.2%. BSE Power index and Bankex tumbled 2.4% and 1.8% respectively, becoming top losers among the sectoral indices while IT and Teck indices were the top gainers, up 1.2% and 1% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1573 cr, 1790 cr and 169 cr respectively. DIIs were net buyers to the tune of Rs 880 cr.

Rupee appreciated 3 paise to end at 66.185/$.

Union Cabinet yesterday approved auction of 69 small and marginal oil fields surrendered by state-owned ONGC and Oil India to private and foreign firms.

OUTLOOK

Chinese markets are closed today and tomorrow for a public holiday, while the Hong Kong exchange will be closed today. Nikkei is up nearly a percent and half and other Asian markets are trading with modest gains. SGX Nifty is suggesting about 20 points higher opening for our market.

In yesterday's report we had mentioned that "7667, the panic bottom made on 25th August, is the next major support to eye on the way down". Nifty, after touching a high of 7863 in the initial trade, plunged all the way to 7699 before closing at 7717.

7667 continues to be major support to eye on the way down. Immediate resistance on the hourly chart is placed around 7915.

As recommended yesterday, in light of the wild moves that we have been witnessing over past couple of days, traders would do well to keep trading volumes low and let the benchmark settle down before taking a fresh view.

India's Services PMI for August will be released today.