NIFTY REBOUNDS FROM 34-DMA SUPPORT; EXTENDS OVERALL CONSOLIDATION

NIFTY REBOUNDS FROM 34-DMA SUPPORT; EXTENDS OVERALL CONSOLIDATION

WORLD MARKETS                             

US indices gained 0.1%-0.3% but closed off the day high touched in the initial trade.

Oil prices climbed following a report that Iran indicated it may support joint action to prop up the oil market. The gains were later pared when data from the American Petroleum Institute showed U.S. crude inventories rose by 4.5 million barrels in the previous week, notably exceeding expectations for a drawdown of 500,000 barrels. US crude settled 1.5% higher at $48.10 a barrel and Brent added 1.6% to $49.96.

US new home sales for July unexpectedly surged, reaching their highest level in almost nine years. Markit Manufacturing PMI for August came in at 52.1.

European markets climbed 0.6%-2.5%. Markit's euro zone flash composite PMI for August came in at a seven month high of 53.3, up from 53.2 in July.

AT HOME

After falling more than half a percent, benchmark indices saw a smart rebound in late noon trade to end marginally in the green. Sensex added 5 points to settle at 27990 while Nifty finished at 8633, up 3 points. BSE mid-cap and small-cap indices fell 0.3% and 0.1% respectively. BSE IT and Teck indices climbed 1.8% each, becoming top gainers among the sectoral indices, followed by 1.7% rise in Telecom index. Oil & Gas index was the top loser, down 1.5%, followed by 1.1% each cut in Power and Capital Goods indices.

Gross buying and selling by FIIs in the cash segment was exactly the same, resulting in net figure of zero. They net sold index futures and stock futures worth Rs 631 cr and 524 cr respectively. DIIs were net sellers to the tune of Rs 452 cr.

Rupee appreciated 13 paise to end at 67.06/$.

Tata Power reported 76% dip in quarterly net profit at Rs 72.5 cr. Revenue fell 4.8% to Rs 6838 cr. Operating profit fell 11.3% to Rs 1635 cr and margin contracted 180 bps to 23.9%.

OUTLOOK

Today morning, Nikkei is up about half a percent, Hang Seng is down a third of a percent, other Asian markets are little changed and SGX Nifty is suggesting about 10 points lower start for our market.

In yesterday's report we had mentioned that the 34-DMA had moved up to 8570, which, along with immediate previous bottom of 8540, makes 8570-8540 an important support area.

Nifty, after touching a low of 8580, rebounded to close at 8633, vindicating the levels mentioned above and extending the broad consolidation.

34-DMA has now moved up to 8580, making 8580-8540 the support area to eye. 8700-8730 continues to be the supply area on the way up, a decisive crossover of which is required for fresh upmove.