7680 IMMEDIATE SUPPORT; 7965 ABOVE 7850
Dow and S & P 500 rose half a percent each while Nasdaq gained 0.8% yesterday on the back of a bounce in oil prices and major stocks such as Apple.
Apple closed up 2.4%, recovering losses of 1.92% from Wednesday when it unveiled new products.
Nymex oil rose $1.77 or 4% to $45.92 a barrel, more than reversing Wednesday's 3.9% decline, despite weekly inventory numbers showing a greater-than-expected build of 2.6 million barrels. Metals, including copper and gold, also gained about half a percent.
Initial jobless claims fell 6,000 to a seasonally adjusted 275,000 for the week ended Sept.5. It was the 27th straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labor market.
U.S. import and export prices posted their largest drop in seven months.
Earlier Shanghai Composite and Nikkei ended lower by 1.4% and 2.5% respectively amidst weak economic data. Core machinery orders in Japan fell by 3.6% in July, while in China, the producer price index fell by 5.9%, signaliing that deflation remains a risk for the world's second largest economy.
European markets lost 0.9%-1.8%. The Bank of England kept interest rates on hold at 0.5%, after policymakers decided it was as it was too early to tell whether the turmoil in China would impact the U.K.
After plunging just under 2% in the initial trade, benchmark indices recouped most of the losses through the session to end lower by just four tenth of a percent. Sensex settled at 25622, down 97 points while Nifty lost 30 points to finish at 7788. BSE mid-cap index ended higher by 0.6% while the small-cap index lost 0.4%. BSE Consumer Durable and Teck indices lost 1.8% and 0.8% respectively, becoming top losers among the sectoral indices while Capital Goods and auto indices gained 0.9% and 0.7% respectively.
FIIs net sold stocks and index futures worth Rs 121 cr and 273 cr respectively but net bought stock futures worth Rs 312 cr. DIIs were net buyers to the tune of Rs 67 cr.
Rupee depreciated 3 paise to end at 66.43/$.
Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 15 points higher opening for our market.
In yesterday's report we had mentioned that the immediate support on the hourly chart is placed at 7700, a sustained trading below which would open up the possibility of retest of the 7540 bottom made on Monday.
The benchmark, touched a low of 7678 in the initial trade but did not sustain there and saw a sustained recovery through the day to end at 7788.
7700-7680 continues to be immediate support, a breach of which would derail the nascent recovery we have witnessed over past three days. 7850 is the immediate hurdle on the hourly chart, above which 7965, the 38.2% retracement level of the entire 8655-7540 fall, would be the next target to eye.
Trading longs can be held with the stop loss of 7680.
India's IIP for July will be released today and is expected to show a reading of 3.41%, slightly lower than June's 3.8% figure.