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.