NIFTY RETREATS AFTER ACHIEVING 8800 TARGET; 8690 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY RETREATS AFTER ACHIEVING 8800 TARGET; 8690 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices gained 0.4%-0.6% with energy and financial stocks leading amidst surging oil prices and encouraging economic data.

WTI crude climbed 2.3% to $49.83 a barrel and Brent rose 2% to $51.86 after the US Energy Information Administration (EIA) said crude stockpiles fell by 3 million barrels last week, which was the fifth unexpected weekly drawdown in U.S. oil inventories.

September ISM non-manufacturing came in stronger than expected at 57.1 versus estimate of 53. Factory orders also increased slightly in August, while the trade deficit in the U.S. widened more than expected to $40.7 billion in August, and mortgage applications increased 2.9% last week.

In Europe FTSE slipped 06% while DAX and CAC lost 0.3% each on reports that the European Central Bank could start tapering bond purchases before its quantitative easing program ended next March. The ECB later denied it had discussed the subject. Italy and Spain however rose 1% and 0.1% respectively.

AT HOME

After gaining about four tenth of a percent in the opening trade, Sensex and Nifty slipped nearly seven tenth of a percent from the top of the day to end lower by 0.3% and 0.4% respectively, breaking three-day winning streak. Sensex lost 114 points to settle at 28221 while Nifty finished at 8745, down 25 points. BSE mid-cap and small-cap indices however gained 0.5% and 0.6% respectively. BSE Bankex fell 0.8%, becoming top loser among the sectoral indices, followed by 0.6% lower IT index. Realty index soared 1.7% to become top gainer, followed by 0.8% higher Basic Material index.

FIIs net bought stocks and index futures worth Rs 243 cr and 154 cr respectively but net sold stock futures worth Rs 389 cr. DIIs were net sellers to the tune of Rs 350 cr.

Rupee depreciated 4 paise to end at 66.50/$.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4% to 0.8% and SGX Nifty is suggesting about 20 points higher start for our market.

Readers would recall that after Nifty took out immediate hurdle of 8740, we were working with initial target of 8800, which was the top made on the "surgical Strike" news day and also coincided with a trendline adjoining recent tops on the daily chart.

Yesterday, the benchmark, after touching a high of 8807 in the initial trade, slipped to end at 8744.

8800 continues to be immediate hurdle to eye, a sustained trading above which is required for the fresh upmove. 8893, the top made on 22nd September, would be the next target if that happens. Meanwhile, immediate support on the hourly chart continues to be placed at 8690, with the stop-loss of which existing longs can be held on to.