NIFTY NEARLY ACHIEVES FIRST MEGA TARGET OF 8150; ECB IN FOCUS

NIFTY NEARLY ACHIEVES FIRST MEGA TARGET OF 8150; ECB IN FOCUS

WORLD MARKETS

Dow and S & P 500 ended little changed and Nasdaq lost half a percent yesterday amidst reports of cease-fire between Russia and Ukraine, another batch of economic data and ahead of key ECB policy meeting.

July factory orders rose in-line with expectations, U.S. auto sales for August came in strong, and the Fed's Beige Book found modest to moderate economic expansion.

Russian President Vladimir Putin said that he spoke to his Ukrainian counterpart Petro Poroshenko on the phone and while there was no peace deal, Putin issued a 7 point plan to end the bloodshed in southeast Ukraine. Negotiators from Kiev, Moscow and pro-separatist rebels are due for more talks on Friday. US stock futures and European markets earlier rose on a statement from Ukraine that a "permanent" cease-fire had been reached in eastern Ukraine—although this comment was later toned down.

European markets gained between 0.7%-1.9%. Eurozone composite PMI for August fell to 52.5 from 53.8 in July, the lowest level in 2014 to date, and lower than a preliminary estimate of 52.8.

Nymex crude surged nearly 3% to $95.5 a barrel. Gold rose 0.4% to $1270 an ounce.

                                                             

AT HOME

Record run continued as benchmark indices gained four tenth of a percent yesterday to scale fresh all-time high. Sensex gained 121 points to settle at 27140 while Nifty finished at 8115, up 32 points. BSE mid-cap and small-cap indices gained 0.8% and 0.4% respectively. BSE IT and Teck indices soared 2.5% and 2.2% respectively, becoming top gainers among the sectoral indices while FMCG index and Bankex lost 0.6% and 0.1% respectively.

India's HSBC Services PMI fell to 50.6 in August from 52.2 in July. The composite PMI fell to 51.6 from 53.

FIIs net bought stocks and stock futures worth Rs 1289 cr and 531 cr respectively but net sold index futures worth Rs 334 cr. DIIs were net sellers to the tune of Rs 470 cr.

Rupee appreciated 20 paise to close at 60.485/$.

OUTLOOK

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

As we have been mentioning for past couple of sessions, we had given first major target of 8150 in our "SAMVAT" report published in November 2013. The benchmark yesterday touched a high of 8142 before closing at 8114, nearly achieving this target.

While the overall view continues to be bullish, consolidation in short term is likely, considering a near 600 point rise in last 16 sessions and a negative divergence that occurred on the hourly chart in yesterday's trade.

Nearest support on the hourly chart has now moved up to 8010, which should serve as the trailed stop loss for trading longs.

Key event to watch out today would be the policy meeting of the European Central Bank.  As economies in the Euro area have continued to falter and in the wake of ECB President Draghi's Jackson Hole speech, there are some expectations of new stimulus measures being announced at today's meeting.