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.