NIFTY RESISTED NEAR 8860 HURDLE; 8690 CONTINUES TO BE IMPORTANT SUPPORT

NIFTY RESISTED NEAR 8860 HURDLE; 8690 CONTINUES TO BE IMPORTANT SUPPORT

WORLD MARKETS                             

US indices fell 0.1%-0.5% on Friday, digesting key inflation data and lower oil and looking ahead to Federal Reserve meeting to be held this week.

US Consumer Price Index rose at a more than expected 0.2% rate last month after being unchanged in July. In the 12 months through August, the CPI increased 1.1% after advancing 0.8% in July. September consumer sentiment came in below the expected 90.8.

Market expectations for a rate hike next week rose slightly after the inflation data, but remained relatively low. U.S. Treasuries traded lower, with the two-year note yield at 0.77% and the benchmark 10-year note around 1.69%. The U.S. dollar index surged to 96.04 from 95.28.

US oil fell 2% to $43.03 per barrel .

European markets fell 0.3%-2.4% with banks leading the declines after the U.S. Department of Justice asked the German lender, Deutsche Bank, to pay $14 billion to settle allegations of mis-selling mortgage securities.

For the week, Dow eked out 0.2% gain, S & P 500 rose 0.5% while Nasdaq soared 2.3%. Europe ended deep in the red, with key markets falling 1%-3.5%. Asian markets too fell with Nikkei and Shanghai down 2.6% and 2.5% respectively while Hang Seng fell 3.2%.

AT HOME

After soaring a percent and fifth in the morning trade, Sensex and Nifty gave away about two third of these gains in sharp noon plunge to end higher by 0.66% and 0.43% respectively. Sensex settled at 28599, up 186 points while Nifty added 37 points to finish at 8780. BSE mid-cap index once again ended in red, losing 0.3%, while small-cap index rose 0.15%. BSE FMCG and IT indices climbed 1.2% each, becoming top gainers among sectoral indices while Metal index tumbled 1.3%, becoming top loser, followed by 0.5% lower Basic Material index.

FIIs net bought stock and index futures worth Rs 661 cr and 427 cr respectively but net sold stock futures worth Rs 522 cr. DIIs were net sellers to the tune of Rs 213 cr.

Rupee appreciated 4 paise to end at 66.98/$.

For the week, Sensex and Nifty lost 0.7% and 1% respectively.

OUTLOOK

Today morning, Japanese market is closed for a public holiday, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting a marginally higher start for our market.

After consolidating around and testing the 34-DMA support, Nifty on Friday surged to 8848, but slipped sharply from there to end at 8780. Readers would recall that for past couple of sessions we had been mentioning that 8860 is where the upper level of the gap created by the big gap down opening on Monday, would be the immediate hurdle to eye and the top made Friday was very close to it.

8860 continues to be the immediate hurdle to eye, upon sustained trading above which, 8970 would the next important resistance. 8690, the bottom made last week, is the important support to eye, a close below which, will also confirm a lower-top lower-bottom formation on the daily chart and would pave the way for the retest of the 8540 bottom, from where the rally had begun in the fag end of August.