NIFTY REBOUNDS FROM 34-DMA SUPPORT; 8860 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM 34-DMA SUPPORT; 8860 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

After a positive start, Dow and S & P 500 saw a gradual downward move through the session to end lower by 0.1% and 0.2% respectively. Nasdaq however, supported by gains in Apple, rose 0.4%.

Oil initially rose on EIA data which showed US oil inventories fell by about 6 lac barrels last week, but could not hold those gains and reversed to end 2.9% lower at $43.58 per barrel.

US August import prices fell 0.2%. In the 12 months through August, import prices fell 2.2%, the smallest decrease since October 2014, after declining 3.7% in July.

Dollar index fell to 95.34 from 95.58. U.S. Treasuries rose after a large sell-off on Tuesday, with the two-year note yield near 0.75% and the 10-year note yield around 1.69%.

European markets, except a 0.1% higher FTSE, ended flat to modestly lower.

AT HOME

Benchmark indices ended marginally higher after a range bound but choppy trading session, breaking two-day losing streak. Sensex settled at 28372, up 19 points while Nifty added 11 points to finish at 8727. BSE mid-cap and small-cap indices however soared 1.3% and 1.2% respectively. BSE Basic Materials and Consumer Durable indices climbed 2% and 1.1% respectively, becoming top gainers among the sectoral indices while IT and Teck indices lost 0.7% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 477 cr, 551 cr and 769 cr respectively. DIIs were net sellers to the tune of Rs 9 cr.

Rupee appreciated 3 paise to end at 66.89/$.

OUTLOOK

Today, markets of China, Taiwan and Korea are shut. Hang Seng is modestly higher, but Nikkei is down more than a percent and SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had mentioned that 8700, the Monday's low, also roughly coincides with the 61.8% retracement level of the 8544-8969 upmove as well as the 34-DMA placed at 8706 and 8685 respectively, and therefore is an important support to eye.

The benchmark, after touching a low of 8689, rebounded to close at 8727, holding on to the support levels mentioned above.

A sustained trading below 8685 would open up the possibility of the retest of the 8544 bottom.

On the way up, 8860, the upper level of the gap created by the big gap-down opening on Monday, continues to be the immediate hurdle to eye, above which, 8969, would be the next hurdle to eye.