WORLD EQUITIES EASE ON HONG KONG PROTESTS; RBI IN FOCUS AT HOME

WORLD EQUITIES EASE ON HONG KONG PROTESTS; RBI IN FOCUS AT HOME

WORLD MARKETS

US indices, after starting with cuts of nearly a percent on Hong Kong protests, recouped most of the losses through the session to end with cuts of upto 0.25%.

Hang Seng plunged 2% yesterday after pro-democracy protest in Hong Kong intensified over the weekend.

Back in the US, pending home sales declined 1% in August and personal income rose 0.3%.

European markets ended with cuts of upto 1.5% with disappointing data weighing on sentiment and protests in Hong Kong affecting some financial firms with exposure to the region. The euro zone economic sentiment index posted a figure not seen since late 2013. The European Commission's estimates also showed that inflation expectations for the bloc had decreased.

Nymex crude rose $1.03 to $940.6 a barrel; Gold gained $3.4 to $1219 an ounce.

                                                             

AT HOME

Benchmark indices ended modestly lower after a rangbound but choppy trading session. Sensex lost 29 points to settle at 26597 while Nifty finished at 7959, down 10 points. BSE mid-cap and small-cap indices however surged 1% and 1.5% respectively. BSE Healthcare and IT indices climbed 2.2% and 1.8% respectively, becoming top gainers among the sectoral indices while Metal and FMCG indices lost 1.1% and 0.9% respectively.

FIIs net bought stocks and index futures worth Rs 105 cr and 99 cr respectively but net sold stock futures worth Rs 145 cr. DIIs were net buyers to the tune of Rs 235 cr.

Rupee plunged 38 paise to close at 61.53/$, marking a 7-month low.

OUTLOOK

China's HSBC manufacturing PMI for September has come in at 50.2, same as that of August but down from flash estimate of 50.5.

Asian markets are trading with cuts ranging in the vicinity of half a percent and SGX Nifty is suggesting about 20 points lower opening for our market.

All eyes today would be on the RBI monetary policy review. While the Apex bank is unlikely to lower repo rate as it pursues its fight to combat inflation, there are some expectations of a 50 bps SLR cut. The tone of RBI's statement would be important in setting expectations about when the central bank would lower interest rates.

In yesterday's report we had mentioned that while Nifty had rebounded from an important trendline support placed around 7840, the near term trend will turn bullish only after the resumption of the higher-top higher-bottom formation on the daily chart. In that light we had advised taking any rebound "with a pinch of a salt".

Nifty, after touching a high of 7992, slipped to close at 7959 and is set to open with a gap down today, vindicating our caution.

8038, the 61.8% retracement level of the recent 8160-7842 fall, continues to be the immediate resistance to eye. 7842 is the nearest support.

NIFTY REBOUNDS FROM TRENDLINE SUPPORT; 8038 IS THE IMMEDIATE RESISTANCE

NIFTY REBOUNDS FROM TRENDLINE SUPPORT; 8038 IS THE IMMEDIATE RESISTANCE

WORLD MARKETS                             

US indices soared nearly a percent on Friday, rebounding from heavy losses suffered on Thursday, after the government raised its estimate of economic growth in the second quarter and consumer sentiment rose in September.

Data from the Commerce Department had GDP increasing at a revised 4.6% annualized rate, up from the prior estimate of 4.2%, and in line with expectations. The Thomson Reuters/University of Michigan's final read on consumer sentiment climbed to 84.6 in September from 82.5 the month before.

European markets, except a 0.2% cut in DAX, gained between 0.1%-1.9%.  DAX was dragged down by a sharp drop for the insurance company Allianz following the news that legendary bond guru Bill Gross was leaving as chief investment officer of Pimco, which Allianz owns.

Nymex crude rose $1.01 to $93.5 a barrel; Gold fell $6.5 to $1215 an ounce.

For the week, US indices lost between 1%-1.5%. European markets lost anywhere between 0.8%-3.2%.

AT HOME

After falling nearly a percent in the morning trade, benchmark indices saw mammoth rebound in the noon trade on the back of S & P outlook change and finally ended higher by about two third of a percent. Sensex gained 158 points to settle at 26626 while Nifty finished at 7969, up 57 points. BSE mid-cap and small-cap indices gained 0.8% and 0.6% respectively. BSE Metal and Realty indices gained 2.5% and 2.3% respectively, becoming top gainers among the sectoral indices while Teck and IT indices lost 0.6% and 0.5% respectively.

In a huge sentiment booster for India, rating agency S&P revised India's credit outlook to 'stable' from 'negative' saying Modi government's "strong" mandate would allow it to implement fiscal and economic reforms.

FIIs net sold stocks, index futures and stock futures worth Rs 1134 cr, 213 cr and 1004 cr respectively. DIIs were net buyers to the tune of Rs 1335 cr.

Rupee ended at 61.14/$, appreciating 20 paise compared to previous close and breaking four-day losing streak.

The government has released its borrowing calender for the second half of this fiscal. The Centre will borrow Rs 2.4 lakh crore against the Budget estimates of Rs 2.48 lakh crore, which is pretty much on target.

SEBI on Friday notified the regulations on real estate and infrastructure investment trusts-REIT and InvIT. The move enables the cash-strapped real estate and infrastructure sectors raise capital by liquidating their assets through these globally-popular financial instruments.

OUTLOOK

Today morning Asian markets, except Nikkei, are trading with modest cuts and SGX Nifty is suggesting about 30 points lower opening for our market.

On Friday, after touching a low of 7842, Nifty rebounded sharply to close at. That was justified as in the vicinity of 7840 lies a big trendline support emanating from adjoining bottoms made in May and August.

Near term trend however, will turn bullish only after the resumption of the higher-top higher-bottom formation on the daily chart. 8038, the 61.8% retracement level of the recent 8160-7842 fall, would be the immediate resistance to eye. Till that is taken out, any rebound should be taken with a pinch of salt.

US EQUITIES FALL THE MOST IN TWO MONTHS; NIFTY AT ONE-MONTH LOW

US EQUITIES FALL THE MOST IN TWO MONTHS; NIFTY AT ONE-MONTH LOW

WORLD MARKETS

US indices plunged between 1.5%-1.9%, marking the worst fall since July 31, as Apple tumbled on glitches tied to its new smartphone and on media reports that Russia had drafted a law to allow the seizure of foreign assets.

Draft law, submitted to Russia's parliament on Wednesday by a pro-Kremlin deputy, would also allow state compensation for those whose assets were taken in foreign jurisdictions. The proposed measure comes after Italy froze luxury properties owned by a longtime friend of President Vladimir Putin.

US durable goods orders fell 18.2% in August while applications for unemployment benefits rose by 12,000 to a  293,000 last week, less than the 300,000 estimate. Markit's initial services PMI for September came in at 58.5 versus an expected 59.0.

European markets fell between 0.7%-1.6%. Bank of England Governor Mark Carney, at a conference, said that the improving economy meant a rate rise was to be expected. .

Nymex crude fell 27 cents to $92.5 a barrel; Gold rose $2.4 to $1222 an Ounce.

                                                             

AT HOME

After plunging nearly a percent and half through the session, benchmark indices recouped a third of the losses in last half an hour to end lower by nearly a percent, extending the losing streak to third straight day and closing at one-month low. Sensex lost 276 points to settle at 26468 while Nifty finished at 7912, down 91 points. BSE mid-cap and small-cap indices lost 2.4% and 3.2% respectively. BSE Realty and Oil & Gas indices tumbled 3.2% and 3.1% respectively, becoming top losers among the sectoral indices while IT and Teck indices gained 1.1% and 0.9% respectively.

FIIs net sold stocks and stock futures worth Rs 851 cr and 866 cr respectively but net bought index futures worth Rs 121 cr. DIIs were net buyers to the tune of Rs 819 cr.

Rupee tumbled 38 paise to close at 61.34/$, marking a 7-week low.

For the September derivative series, Nifty lost 0.5%, snapping 8-series winning run.

OUTLOOK

Today morning Asian markets are trading with cuts in the vicinity of half a percent and SGX Nifty is suggesting about 30 points lower opening for our market.

In yesterday's report we had mentioned that 7950-7925 continues to be a crucial support zone, a breach of which would confirm a lower-top lower-bottom formation on the daily chart. The benchmark tumbled 91 points to settle at 7912, breaking this support.

This opens up the possibility of the larger retracement of the recent 7540-8180 upmove. 7860 and 7785, the 50% and 61.8% retracement levels of this upmove are the next support levels to eye. Immediate resistance on the hourly chart has now moved to 8060, a crossover of which is required to generate a buy on the hourly chart and bring bulls back in the game.

Till then keep wearing your bearish mask.

BANG ON TARGET

BANG ON TARGET

WORLD MARKETS                             

After a flattish start, US indices saw a sustained northward move through the session to end with gain raning from 0.8%-1%, after an upbeat report on new-home sales and on hopes of monetary stimulus from the European Central Bank.

New-home sales rose 18% to 504,000 units in August after a 1.9% gain in July. Existing-home sales declined in August for the first time in four months.

Comments from the Chicago Fed President Charles Evans that the central bank should be "exceptionally patient" in withdrawing stimulus, also boosted the sentiment.

A sluggish reading on German business confidence raised hopes of the European Central Bank stimulus after the keenly watched German Ifo business-climate index for September fell to a 17-month low of 104.7 from 106.3 in August.

European markets ended with gains ranging from 0.5%-1.7%.

Dollar index jumped to 85.06 from 84.70. Nymex crude rose $1.2 to $92.8 a barrel; Gold fell $2.5 to $1219.5 an ounce.

AT HOME

After falling nearly eight tenth of a percent following the Supreme Court verdict on the coal block case, benchmark indices erased most of the losses to end just modestly lower. Sensex lost 31 points to settle at 26745 while Nifty finished at 8002, down 15 points. BSE mid-cap and small-cap indices tumbled 1.2% and 1.6% respectively. BSE Realty and Capital Goods indices were the top losers among the sectoral indices, giving away 1.7% each while FMCG and Healthcare indices gained 1.8% and 0.6% respectively.

In a huge setback for coal block allottees, the Supreme Court quashed 214 out of 218 coal blocks allocated between 1993 and 2008. The court asked Coal India Ltd to take over such blocks within 6 months and auction them. The court also directed for a penalty of Rs 295 per tonne imposed on all cancelled coal block holders.

FIIs net sold stocks, index futures and stock futures worth Rs 794 cr, 164 cr and 559 cr respectively. DIIs were net sellers to the tune of Rs 15 cr.

Rupee depreciated 2 paise to close at 60.96/$.

OUTLOOK

Today morning, Asian markets are trading with modest gains and SGX Nifty is suggesting about 15 points higher opening for our market.

In Yesterday's report we had mentioned that 7950, where 34 DMA is placed, is the next important support to eye. Nifty, after exactly touching the low of 7950, rebounded smartly to end at 8002, and is set to open higher today, vindicating our view.

7950-7925 continues to be a crucial support zone, a breach of which would confirm a lower-top lower-bottom formation on the daily chart.

On the way up, 8085 is the immediate resistance to eye, a crossover of which is required to put the bulls back in the dominating position.

WORLD EQUITIES EASE ON GROWTH CONCERNS, MIDDLE EAST TENSION

WORLD EQUITIES EASE ON GROWTH CONCERNS, MIDDLE EAST TENSION

WORLD MARKETS                             

US indices fell about half a percent yesterday, extending the losing streak to third straight session on concerns over global growth and conflict in the middle east.

Euro-zone business growth fell to a 2014 low in September, while the HSBC/Markit Flash China PMI rose to 50.5 this month even as factory employment slid to its lowest in more than five years.

The United States and Arab allies bombed Syria, killing dozens of Islamic State militants and members of a separate al Qaeda-tied group. And the Israeli army said it downed a Syrian fighter jet that violated its airspace.

European markets saw deep cuts in the vicinity of a percent and half.

Nymex crude rose 69 cents to $91.6 a barrel; Gold gained $4.1 to $1222 an ounce.

AT HOME

After a flattish start, benchmark indices saw a sustained downward move through the session with accelerated selling pressure in the noon trade and finally ended with deep cuts of more than a percent and half, suffering the largest cut since 8^th July. Sensex tumbled 431 points to settle at 26776 while Nifty finished at 8018, down 129 points. BSE mid-cap and small-cap indices plunged 1.9% and 2.5% respectively. All the BSE sectoral indices ended in red with Realty index leading the tally, giving away 4.9%, followed by 2.6% cut in the Oil & Gas index.

FIIs net sold stocks, index futures and stock futures worth Rs 1185 cr, 316 cr and 440 cr respectively. DIIs were net buyers to the tune of Rs 326 cr.

Rupee fell 13 paise to close at 60.94/$.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a marginally lower opening for our market.

In yesterday’s report we had mentioned that 8035 is the immediate support on the hourly chart which should serve as the stop loss for trading longs. Nifty breached this support yesterday and fell to 8008 before closing at 8017.

Next support comes around 7950 where 34 DMA is placed. Immediate resistance on the hourly chart would come around 8100, a crossover of which is required to put bulls back in the dominating position. Traders are advised to keep a stop loss of 8100 in short positions.

The Supreme Court will deliver its verdict in the coal allocation case today.

CHINA DATA LIFTS ASIAN MARKETS; 8035 CONTINUES TO BE IMMEDIATE SUPPORT

CHINA DATA LIFTS ASIAN MARKETS; 8035 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

After a flattish start, US indices saw a sustained downward move through the session to end with cuts ranging from 0.6%-1.1% after home sales unexpectedly declined in August and China signalled it would not boost stimulus.

Chinese Finance Minister said that Beijing would not make big changes in response to one economic indicator, curbing thinking that softer economic readings would prompt additional stimulus from the central government.

National Association of Realtors reported sales of previously owned homes declined 1.8% last month vs. expectations of  0.8% gain. The Federal Reserve Bank of Chicago's national economic activity index declined in August.

European markets fell between 0.5%-1.4%. ECB President Mario Draghi, in his testimony before the European Union's committee of economic affairs, reiterated that the euro zone recovery was losing momentum and said he expected inflation to remain at low levels, before rising in 2015 and 2016.

Nymex crude lost 1% to $90.9 a barrel; Gold rose $1.3 to $1218 an ounce.

AT HOME

After falling nearly two third of a percent in the initial trade, benchmark indices saw a sustained northward move through the session to end higher by nearly a third of a percent. Sensex gained 116 points to settle at 27207 while Nifty finished at 8146, up 25 points. BSE mid-cap and small-cap indices gained 0.3% and 0.2% respectively. BSE Consumer Durable and FMCG indices gained the most among the sectoral indices, rising 3.1% and 1.9% respectively while Metal and Healthcare indices were the top losers, giving away 1.2% and 0.9% respectively

FIIs net sold stocks and stock futures worth Rs 186 cr and 329 cr but net bought index futures worth Rs 165 cr. DIIs were net buyers to the tune of Rs 31 cr.

Rupee ended flat at 60.815/$.

OUTLOOK

China's HSBC flash PMI for September has come in at 50.5 up from the reading of 50.2 in August and expected figure of 50.

Asian markets have improved after this data and are now trading flat to modestly higher. SGX Nifty is suggesting about 15 points lower opening for our market.

In yesterday's report we had mentioned that the immediate support on the hourly chart is placed at 8035, which should serve as the stop loss for trading longs. Nifty, after touching a low of 8065 in the initial trade, recovered smartly to end at 8146, holding the 8035 support.

Hold trading longs with the stop loss of 8035 continues to be the advise. 8180 continues to be the immediate target above which 8250 would be the next level to eye.

ASIA STARTS THE WEEK ON A WEAK NOTE; 8035 IMMEDIATE SUPPORT FOR NIFTY

ASIA STARTS THE WEEK ON A WEAK NOTE; 8035 IMMEDIATE SUPPORT FOR NIFTY

WORLD MARKETS

US indices ended mixed on Friday with the Dow finishing at a record as investors welcomed Alibaba's market debut and Scotland's vote to remain in the U.K.

55% of Scottish voters supported sticking with the nation's 307-year union with the U.K. after Prime Minister David Cameron vowed to give additional policy-making powers to Scotland.

Alibaba surged in in the Chinese online retailer's U.S. trading debut after the company raised nearly $22 billion in an initial public offering, the largest IPO ever.

Back in the US, the Conference Board's index of leading indicators rose 0.2% in August versus expectations for a 0.4% gain.

European markets too ended mixed. German producer prices for August showed a decline of 0.1% from the month before, with a yearly drop of 0.8%.

Gold fell 0.8% to $1216.6 an ounce and Nymex crude declined 66 cents to $92.4 a barrel.

For the week, Dow gained 1.7%, S & P rose 1.3% and Nasdaq was up 0.3%

Over the weekend, finance ministers and central bank chiefs from the Group of 20 met in the Australia and said they were close to adding an extra $2 trillion to the global economy and creating millions of new jobs, but Europe's extended slowdown remains a major stumbling block.

                                                             

AT HOME

After yesterday's mammoth upmove, today was a day of consolidation as benchmark indices ended little changed after a choppy trading session. Sensex lost 22 points to settle at 27090 while Nifty finished at 8121, up 7 points. BSE mid-cap and small-cap indices gained 0.04% and 0.6% respectively. BSE IT and Teck indices gained the most among the sectoral indices, rising 1.4% and 1.1% respectively while Capital Goods and Oil & Gas indices were the top losers, down 1.9% and 1.2% respectively.

FIIs net sold stocks and index futures worth Rs 7 cr and 43 cr respectively but net bought stock futures worth Rs 96 cr. DIIs were net buyers to the tune of

Rs 237 cr.

Rupee appreciated 2 paise to close at 60.81/$.

For the week, Nifty and Sensex gained 0.2% and 0.1% respectively, extending the winning streak to sixth straight week.

OUTLOOK

Today morning Asian markets are trading with cuts ranging from 0.5%-1% and SGX Nifty is suggesting about 50 points lower opening for our market.

In Friday's report we had mentioned that by taking out the 8060 hurdle, Nifty had generated a fresh buy on the hourly chart and that 8180 would be the immediate target to eye.

Nifty touched a high of 8161 on Friday, coming very close to the 8180 target mentioned above from where profit booking took the benchmark lower to 8121.

The benchmark is set to open with a downward gap today. Immediate support on the hourly chart is placed at 8035, a breach of which would confirm a sell on the hourly chart and would pave the way for the retest of the 7925 bottom.

Traders are advised to keep a stop loss of 8035 in trading longs.

GOLD ON THE VERGE OF A BIG BREAKDOWN

As shown in the weekly chart below, after touching a low of $1180 in June 2013, Gold was broadly in a consolidation mode. A breach of 1180 would confirm a breakdown from a descending triangle pattern, the target of which would be about $926.

NIFTY CLIMBS THE MOST IN 3-½ MONTHS; STAY LONG WITH THE STOP LOSS OF 8030

NIFTY CLIMBS THE MOST IN 3-½ MONTHS; STAY LONG WITH THE STOP LOSS OF 8030

WORLD MARKETS                             

US indices climbed between 0.5%-0.7% yesterday, with the Dow and S & P 500 hitting fresh all-time high as markets continued to relish the Federal Reserve's renewed vow to keep benchmark rates low.

On the data front, the number of Americans filing for jobless benefits dropped to a two-month low and separately, housing starts declined in August. The Philadelphia Federal Reserve's index of factory activity  decelerated in September, but its employment component rose to its highest level since the middle of 2011.

Except a flattish Italy, European markets gained between 0.6%-1.4% after the ECB announced a new rotating voting system that raised hopes for euro zone quantitative easing. Italy fared the worst after the International Monetary Fund cuts it growth outlook.

The new rotation system for the ECB's Governing Council means Jens Weidmann, the governor of the German Bundesbank, will sit out the council meetings in May and October next year. Weidmann has traditionally been critical of ECB aggressive stimulus measures, so his prospective absence increased market speculation the ECB might yet launch a QE program as early as May. Nymex crude fell 1.4% to $93.1 a barrel; Gold declined 0.7% to $1227 an ounce.

Late yesterday, the People's Bank of China cut the 14-day repo rate by 20 basis points to 3.5%. This comes days after the PBOC was believed to have pumped $81 billion into China's top five banks. News reports also said the PBOC injected $1.3 billion into money markets this week.

AT HOME

It was a day of a dramatic comeback by bulls as benchmark indices soared just under two percent, registering the highest gain in 3½-months. Sensex surged 481 points to settle at 27112 while Nifty finished at 8115, up 139 points. BSE mid-cap and small-cap indices gained 1.8% and 2.7% respectively. All the BSE sectoral indices closed in green with Realty and Consumer Durable indices leading the tally, putting on 4.6% and 3.2% respectively. 46 out of 50 Nifty stocks closed higher.

FIIs net sold stocks worth Rs 10 cr but net bought index futures and stock futures worth Rs 645 cr and 81 cr respectively. DIIs were net buyers to the tune of Rs 84 cr.

Rupee appreciated 9 paise to close at 60.83/$.

India and China yesterday signed a five-year trade and economic co-operation pact and a railway co-operation pact.

The Supreme Court yesterday refused to stay a possible gas price hike and said that the government needs to clarify the implementation of the Rangarajan Panel's recommendations. The Centre is expected to take a decision by the end of this month.

OUTLOOK

Today morning Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting a marginally higher opening for our market.

In yesterday's report we had mentioned that 7900-8060 is the immediate range, a breach of which, on either side, is required to take a fresh view on Nifty. The benchmark surged 139 points to settle at  8115, taking out the 8060 hurdle with ease and generating a fresh buy on the hourly chart.

8180, the all-time high made last week, is the immediate target on the way up. Immediate support on the hourly chart is placed at 8030, with the stop loss of which trading longs should be held on to.

Global markets will watch out for the results of Scotland's independence referendum, expected later in the day. The latest polls indicated the "No" vote led by 54%, which boosted sterling to a two-week high against the U.S. dollar in early Asian trade.

7900-8060 IS THE IMMEDIATE RANGE

7900-8060 IS THE IMMEDIATE RANGE

WORLD MARKETS

US indices gained about a fifth of a percent, with the Dow ending at a record and the S&P 500 back above 2,000, after the Federal Reserve said it was nearing the end of its asset purchases and reiterated it would not hike interest rates for a 'considerable' period.

In its statement released after its two-day meeting, the Fed left largely intact key provisions and cut its bond buying down to $15 billion a month, while indicating the asset purchases would end altogether in October.

In a news conference held after the announcement of policy decision, Fed Chair Janet Yellen reiterated there continued to be "significant under-utilization" in the labor force, with inflation running below the Fed's objectives.

US Consumer Price Index declined 0.2% last month, while prices excluding food and energy costs held unchanged. A measure of confidence among home builders rose to its highest level since 2005.

European markets, except a 0.2% cut in FTSE, gained between 0.3%-1.6% with Italy and Spain leading the tally. FTSE was hit by uncertainty ahead of the closely fought Scottish independence referendum. European bank stocks gained ahead of the launch of the European Central Bank's first Targeted Long-Term Refinancing Operations (TLTROs). The cheap loan scheme will start on Thursday and is expected to provide banks with up to 400 billion euros ($518 billion) of funds.

Nymex crude fell 46 cents to $94.4 a barrel; Gold dropped 80 cents to $1236 an ounce.

                                                             

AT HOME

Benchmark indices ended with gains of about half a percent after a rangebound but choppy trading session, recouping some of the losses suffered in past two sessions. Sensex gained 139 points to settle at 26631 while Nifty finished at 7975, up 42 points. BSE mid-cap and small-cap indices gained 0.2% and 0.3% respectively. Except a 1.1% cut in BSE Consumer Durable index and a 0.04% cut in the Bankex, all other sectoral indices ended higher, with IT and Power indices leading the tally, putting on 1.5% and 1.4% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 136 cr. 52 cr and 104 cr respectively. DIIs were net sellers to the tune of Rs 161 cr.

Rupee appreciated 13 paise to close at 60.92/$.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 30 points lower opening for our market. Nikkei is up a percent as the yen has weakened to a fresh six-year low against the dollar and exports fell by a smaller-than-expected 1.3% in August.

After achieving our indicated downside target of 7935 on Tuesday, Nifty rebounded yesterday to close at 7975. 7935-7900 continues to be important support area where 7935 is the 38.2% retracement level of the recent 7540-8180 upmove and 7900 is where 34-DMA is placed.

On the way up, 8050-8060, the erstwhile support, will now act as the resistance. This makes 7900-8060 a no trading zone, a breach of which, on either side, is required to take a fresh view on Nifty.

Key event to watch out in the Europe would be independence vote in Scotland. The result will be announced tomorrow.

NIFTY PLUNGES, ACHIEVES DOWNSIDE TARGET; FED IN FOCUS

NIFTY PLUNGES, ACHIEVES DOWNSIDE TARGET; FED IN FOCUS

WORLD MARKETS

US indices, after a negative start, saw a sustained northward move through the session to end with gains between 0.6%-0.75% following reports of Chinese stimulus and amid hopes that the Federal Reserve will maintain its dovish policy stance.

US Fed ends a two-day policy meeting today and many experts were bracing for more hawkish language, but a shift in expectations occurred after Wall Street Journal journalist Jon Hilsenrath argued that the Fed would keep its "significant underutilization" of labor market resources in its expected statement.

Also bolstering equities and commodities was a Bloomberg report, which cited Sina.com, in saying the People's Bank of China would begin a 500 billion yuan standing lending-facility to the country's five largest banks.

Data showed that the US producer prices held flat in August, illustrating little-to-no inflation pressure.

European markets fell between 0.2%-0.4%. U.K. August inflation dropped slightly in line with expectations.

Nymex crude rose more than 2% to $94.9 a barrel; Gold rose $1.6 to $1237 an ounce.

                                                             

AT HOME

After trading in a narrow range in the morning trade, benchmark indices saw a sharp sell-off in the noon trade to end with deep cuts of about a percent and quarter, marking the largest fall in a month and half. Sensex slumped 324 points to settle at 26492 while Nifty finished at 7933, down 109 points. BSE mid-cap and small-cap indices lost 3.4% and 4% respectively. All the BSE sectoral indices ended in red with Realty and Power indices leading the tally, giving away 3.4% and 3.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 829 cr, 163 cr and 30 cr respectively. DIIs were net buyers to the tune of Rs 466 cr.

Rupee appreciated 8 paise to close at 61.055/$.

OUTLOOK

Today morning Asian markets are trading with average gains of half a percent and SGX Nifty is suggesting about 30 points higher opening for our market.

In yesterday's report we had mentioned that having breached the 8050 support, Nifty is likely to head to 7935, which is the 38.2% retracement level of the recent 7540-8180 upmove.

Nifty plunged 109 points to settle at 7933, achieving the target mentioned above and vindicating our view.

Apart from the 7935 support mentioned above, Nifty is now also closer to the 34 DMA placed around 7890. This makes 7935-7890 is an important support area. On the way up, 8050, the erstwhile support, would now act as the immediate resistance on the way up, a crossover of which is required to generate a buy on the hourly chart and bring the bulls back in the game.

Traders are advised to stay on the sideline and watch for the breach of 8050/7890 levels for taking fresh view on Nifty.

US Fed concludes its two day policy meeting today and markets would be keenly watching for cues to when the interest rate might begin to rise.

NIFTY BREACHES 8050 SUPPORT AS FIIs TURN SELLERS

NIFTY BREACHES 8050 SUPPORT AS FIIs TURN SELLERS

WORLD MARKETS                             

US indices ended mixed yesterday with the Dow rising a third of a percent, S & P 500 losing 0.1% while the Nasdaq tumbled 1.1%. This was the largest cut for Nasdaq since July 31. Out of 10 sectors of S & P 500, technology was the hardest hit while energy performed the best.

Fed Bank of New York's Empire State gauge of general business conditions climbed to 27.54 from 14.69 in August, with the current reading the highest since October 2009. Separate data had U.S. manufacturing output falling for the first time in seven months in August.

European markets, except a marginally higher DAX, fell between 0.1%-1% with Italy and Spain leading the tally. Along with concerns over the upcoming US FOMC policy meeting, worries regarding the Thursday's independence vote in Scotland also weighed on the sentiment. 

Nymex crude rose 65 cents to $92.9 a barrel and gold added $3.6 to $1235 an ounce.

AT HOME

After a gap down opening, benchmark indices drifted further lower through the session to end lower by about eight tenth of a percent and marking the lowest finish since 1st September. Sensex slipped 244 points to settle at 26817 while Nifty finished at 8042, down 63 points. BSE mid-cap and small-cap indices however gained 0.2% and 0.7% respectively.

Except a 0.4% and 0.2% rise in BSE Healthcare and Realty index, all other sectoral indices ended in red with Metal index leading the tally, giving away 1.7%, followed by 1% each cut in Oil & Gas and IT indices.

Rupee depreciated 48 paise to close at 61.13/$, marking a 1 1/2-month low.

FIIs net sold stocks, index futures and stock futures worth Rs 75 cr, 1395 cr and 532 cr respectively. DIIs were net sellers to the tune of Rs 75 cr.

Inflation data based on wholesale price index (WPI) for August hit a five year low at 3.74%, falling sharply from July's 5.19%.

August trade deficit narrowed to $10.83 from $12.2 bn in July. Imports rose 2.08% to $37.8 bn while exports were up 2.4%.

Advance tax figures for the Q2 suggested that top 14% companies registered a 19% increase.

OUTLOOK

Today morning Asian markets are trading with modest cuts and SGX Nifty is suggesting about 20 points lower opening for our market.

For past couple of sessions we have been mentioning that 8050-8060 is an important support area, a breach of which will confirm the lower-top lower-bottom formation on the hourly chart and will set the stage for the further correction. Nifty yesterday tumbled 63 points to settle at 8042, breaking this support area.

7935, the 38.2% retracement level of the recent 7540-8180 upmove, is the next support level to eye. 8115 is the immediate resistance on the hourly chart.

Traders are advised to wait for the crossover of 8115 for building fresh longs.

US Fed starts its two day policy meeting today.

ASIA STARTS LOWER ON WEAK US LEAD, POOR CHINESE DATA; 8060 CONTINUES TO BE IMMEDIATE SUPPORT

ASIA STARTS LOWER ON WEAK US LEAD, POOR CHINESE DATA; 8050 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS

US indices fell between 0.4%-0.6% on Friday, breaking five weeks of consecutive gains as investors awaited the Federal Reserve's announcement due on Wednesday.

The consumer sentiment index for September came in above estimates and the highest in more than a year. Retail sales rose in-line with expectations in August at 0.6% after July's subdued reading of a 0.3% gain. Separately, the Labor Department reported the biggest drop in nine months for U.S. import prices, which fell in August, matching expectations.

The European Union and the US implemented a new round of sanctions against Russia on Friday, placing restrictions on firms including Russia's largest bank, several state-owned defense technology companies and five Russian energy companies

European indices ended mixed with modest changes. FTSE outperformed to close 0.1% higher, after a new YouGov poll showed Scottish voters were edging towards a "no" vote in Thursday's independence vote.

Nymex crude fell 56 cents to $92.3 a barrel; Gold declined $7.5 to $1231 an ounce.

For the week, US indices lost 0.3%-1.1% and European markets declined 0.7%-2.3%.

                                                 

AT HOME

Benchmark indices ended with modest gains after a rangebound session on Friday. Sensex gained 65 points to settle at 27061 while Nifty finished at 8105, up 20 points. BSE mid-cap and small-cap indices gained 0.2% and 0.5% respectively. BSE Power and Capital Goods indices lost 1.3% and 0.8% respectively, becoming top losers among the sectoral indices while Healthcare and Consumer Durable indices gained 0.7% each.

FIIs net bought stocks worth Rs 183 cr but net sold index futures and stock futures worth Rs 497 cr and 637 cr respectively. DIIs were net sellers to the tune of Rs 208 cr.

Rupee appreciated 27 paise to close at 60.65/$.

Industrial activity, as measured by IIP, slipped to 0.5% in the month of July from 3.9% in the previous month (which was revised higher from 3.4%).

CPI for August came in at 7.8% against 7.96% in the previous month. Core CPI declined to 6.9% from 7.4%.

For the week, Sensex and Nifty gained a fourth of a percent, extending the winning streak to fifth week.

OUTLOOK

Over the weekend, China released a raft of data that raised concerns about a weakening economy. August industrial output rose 6.9% y-o-y, its slowest pace since 2008, while fixed-asset investment and retail sales both missed forecasts. Geopolitics also weighed on sentiment with fighting reported in eastern Ukraine on Saturday in breach of an eight-day ceasefire.

Today morning Asian markets are trading with average cuts of half a percent and SGX Nifty is suggesting about 50 points lower opening for our market.

With today's gap down opening, Nifty would be back in the vicinity of the important 8050 support, from where the benchmark has bounced back thrice in last two weeks. A breach of 8050 would also confirm a bearish "Head & Shoulder" formation on the hourly chart which would give a downside target of about 7940.

Traders are advised to keep a stop loss of 8050 in trading longs.

India’s WPI for August would be released today and is expected to further ease to 4.1% from  5.19% in July.