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.