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.