9920 CONTINUES TO BE IMMEDIATE SUPPORT; TCS, INDUSIND EARNINGS IN FOCUS

9920 CONTINUES TO BE IMMEDIATE SUPPORT; TCS, INDUSIND EARNINGS IN FOCUS

WORLD MARKETS                             

US indices gained about 0.2% after digesting Fed minutes which showed it believes the economy is strong enough to withstand another rate hike in December.

Minutes showed that one more interest rate increase this year was "likely to be warranted" given that the economic outlook remained "unchanged" in the medium term, a summary showed. Policymakers, however, remained concerned about inflation.

Dollar index fell.

Oil extended the upmove to third consecutive day with Brent up 0.6% to $56.94 a barrel and WTI up 0.8% at $51.30.

Main European markets ended mixed with modest changes. Italy and Spain rose 0.9% and 1.3% respectively. Spanish government asked for greater clarity from Catalan authorities over whether or not the region had declared independence.

AT HOME

After gaining about half a percent in first hour or so, benchmark indices plunged sharply in the late noon trade to end with cuts of about three tenth of a percent, breaking three-day winning streak. Sensex settled at 31834, down 90 points while Nifty lost 32 points to finish at 9985. BSE mid-cap and small-cap indices tumbled 0.8% and 1.1% respectively. BSE Realty and Metal indices fell 2% and 1.4% respectively, becoming top losers among the sectoral indices while Telecom and Oil & Gas indices were the top gainers, up 2.8% and 1.1% respectively.

FIIs net sold stocks worth Rs 108 cr but net bought index futures and stock futures worth Rs 768 cr and 486 cr respectively. DIIs were net buyers to the tune of Rs 234 cr.

Rupee gained 15 paise to end at 65.14/$.

OUTLOOK

Today morning, Asian markets are trading with modest gains and SGX Nifty is suggesting about 25 points higher start for our market.

After Nifty took out 34-DMA hurdle of 9930, we had given target of 10015, the 67% retracement level of the 10180-9687 fall. Once that was achieved, we had said that 10100 is the next target to eye and stop-loss in the long positions should be raise to 9920.

Yesterday, Nifty, after touching a high of 10067, slipped sharply to touch a low of 9955 and finally closed at 9985.

9920 continues to be immediate support to eye, a breach of which will confirm a sell on the hourly chart and would pave the way for further correction. 9814, the 67% retracement level of the recent 9687-10067 upmove, would be the next downside target if that happens.

On the way up, 10067, the top made yesterday, is the immediate hurdle above which 10180, the top made in September, would be the next major resistance to eye.

TCS and Indusind Bank will report their quarterly earnings today.

IIP for August is expected to show a growth of 2.5%, up from 1.2% in July. September CPI is expected to inch up to 3.56% from 3.36% in August.