FED DECISION REIGNITES GLOBAL GROWTH CONCERNS; NIFTY RETREATS FROM THE VICINITY OF IMPORTANT HURDLE
US indices plunged 1.4%-1.7% on Friday after the Federal Reserve's overnight decision to hold interest rates at record lows fanned worries about the health of the global economy.
Dollar index jumped nearly a percent, with the euro falling below $1.13.
Treasury yields extended Thursday's decline, with 10-year note yields trading around 2.13%, while two-year yield held near 0.67%. Gold gained $21 to $1138 an ounce. Nymex oil plunged 4.73% or $2.22 to settle at $44.68 a barrel.
Earlier Shanghai Composite gained 0.42% while Nikkei lost 2%.
European markets tumbled 1.3%-3.1% with DAX leading the tally.
For the week, Dow and S & P 500 ended mildly lower while Nasdaq gained 0.1%. European markets lost 0.2%-2%.
In Greece, Prime Minister-elect Alexis Tsipras claimed victory in the country's general elections on Sunday and will return to power in a coalition government with the right-wing Independent Greeks.
After climbing nearly 2% in the morning trade, benchmark indices gave away half of the gain in the noon trade to end higher by a percent. Sensex settled at 26219, up 255 points while Nifty gained 83 points to finish at 7982. BSE mid-cap and small-cap indices gained 0.9% and 1.1% respectively. BSE Realty index and Bankex soared 3.2% and 2.7% respectively, becoming top gainers among the sectoral indices while FMCG and Consumer Durable indices lost 0.6% and 0.2% respectively.
FIIs net bought stocks, index futures and stock futures worth Rs 644 cr, 470 cr and 1090 cr respectively. DIIs were net buyers to the tune of Rs 415 cr.
Rupee soared 78 paise to end at 65.67/$.
Today morning Nikkei is closed, other Asian markets are trading with cuts of 1%-2% and SGX Nifty is suggesting about 80 points lower opening for our market.
Ever since Nifty took out immediate hurdle of 7850, we had been working with target of 7965. In Friday's report we had mentioned that above 7965, 8092, the top made on 28th August would be the next target to eye.
The benchmark on Friday surged all the way to 8055 but witnessed severe profit booking and ended at 7982.
We however believe that the rebound seen over past eight sessions is just a pullback and the medium term trend continues to be down.
Immediate support on the hourly chart has moved up to 7860, a breach of which will generate sell on the hourly chart and can result in resumption of the downmove.
We had advised booking profit in trading longs on Friday and would advise building fresh longs only above 8092, where the previous top on the daily chart as well as the 34-DMA are placed.