NIFTY SET TO SURGE AFTER HOLDING 34-DMA SUPPORT; 8860 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY SET TO SURGE AFTER HOLDING 34-DMA SUPPORT; 8860 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

Dow and S & P 500 climbed 1% each and Nasdaq surged 1.5% yesterday, supported by gains in Apple and rebound in oil and as weak retail sales data was seen as boosting the chances of the Federal Reserve keeping interest rates on hold this month.

Retail sales for August missed expectations, falling more than expected. Initial jobless claims came in at 260,000, slightly below expectations, while August PPI came in unchanged, missing expectations. Industrial production fell 0.4% in August, more than the expected 0.3% slide.

Apple soared 3.4%, taking weekly gains to 12%, on strong iPhone 7 sales.

US oil rose 0.8% to $43.91 per barrel.

Dollar index .Gold fell $8 to $1318 per ounce.

European markets gained 0.1%-0.8%. The Bank of England kept interest rates and its bond-buying program unchanged. The central bank raised its third-quarter growth forecast to 0.3% quarter-on-quarter from a previous estimate of 0.1%. It also said inflation would reach the 2% target in the first half of 2017. U.K. retail sales rose 6.2% year-on-year last month, beating market expectations.

AT HOME

It was yet another day of consolidation with positive bias as benchmark indices ended with modest gains after a range bound but choppy trade. Sensex added 41 points to settle at 28413 while Nifty finished at 8743, up 16 points. BSE mid-cap index however fell 0.2% while small-cap index rose 0.3%. BSE FMCG and Healthcare indices rose 0.7% and 0.5% respectively, becoming top gainers among the sectoral indices while Utilities and Consumer Durable indices were the top losers, down 1.2% and 1% respectively.

FIIs net bought stocks worth Rs 345 cr but net sold index futures and stock futures worth Rs 592 cr and 518 cr respectively. DIIs were net sellers to the tune of Rs 456 cr.

Rupee depreciated 13 paise to end at 67.02/$.

India's trade deficit in August narrowed 38% y-o-y to $7.674 bn while figure for July was $7.76 bn. Exports fell 0.3% y-o-y to $21.5 bn while imports were down 14.1% y-o-y at $29.2 bn.

Oil marketing companies hiked petro price by 58 paise/litre but cut diesel price by 31 paise.

OUTLOOK

Markets in China, Taiwan and Korea continue to remain shut for the second day. Other Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 40 points higher start for our market.

Readers would recall that we have been repeatedly telling that the region in the vicinity of 8700 is the crucial support area as the 61.8% retracement level of the 8544-8969 upmove and 34 DMA are placed at 8706 and 8685 respectively.

Nifty has consolidated around these levels for past three sessions and is set to open higher today, giving more credence to it.

8689, the bottom made this week, is the important immediate support to eye. On the way up, 8860 continues to be the immediate hurdle to eye.