OIL STAGES A MAMMOTH REBOUND; NIFTY HOLDS CRUCIAL 7800 SUPPORT

OIL STAGES A MAMMOTH REBOUND; NIFTY HOLDS CRUCIAL 7800 SUPPORT

WORLD MARKETS

US indices soared 2.3%-2.5% yesterday in a second straight day of recovery from a recent plunge, with sentiment helped by a rebound in oil and continued signs of strength in the U.S. economy.

Key highlight of the day was a big surge in oil. Nymex crude soared more than 10.3% to $42.56 a barrel, its biggest daily gain since March 2009, with most of the gains attributed to short covering after lower-than-expected crude inventories. Brent also surged more than 8% to above $46 a barrel.

Back in the US, the second estimate of second-quarter GDP came in at 3.7%, topping the first read of an annualized 2.3%. Weekly jobless claims came in slightly lower than expected at 271,000, marking the first decline in five weeks. July pending home sales rose 0.5%, holding steady from an upwardly revised June reading of a 0.5% increase.

Earlier Shanghai Composite soared 5.4% to reclaim the 3000 mark.

Dollar strengthened against the euro and yen but weakened against emerging market currencies.

European markets climbed 3.1%- 3.6%.

                                                             

AT HOME

After a big gap up opening, benchmark indices added some more weight through the session to end with hefty gains of 2% on the expiry of the August derivative series, registering the biggest single day gain since 15th January. Sensex soared 517 points to settle at 26231 while Nifty finished 7949, up 157 points. BSE mid-cap and small-cap indices climbed 2.5% each. All the BSE sectoral indices ended in green with Consumer Durable and Realty indices leading the tally, up 5.1% and 4% respectively.

FIIs net sold stocks worth Rs 3347 cr but net bought index futures and stock futures worth Rs 1385 cr and 10 cr respectively. DIIs were net buyers to the tune of Rs 2577 cr.

Rupee appreciated 10 paise to end at 66.04/$.

The parliamentary affairs minister Venkaiah Naidu today announced nominations of 98 cities for its ambitious Smart Cities project. Remaining two cities will be announced later. As per the five-year plan, the government will allocate Rs 200 crore this year and follow up with Rs 100 crore every year for remaining four years for every city. The cities will be developed to provide world class infrastructure, sustainable environment and smart solutions

OUTLOOK

Today morning, Asian markets are trading with gains of 2%-2.6% and SGX Nifty is showing a reading of 8130, which is higher by about 130 points compared to closing level of September future in our market.

After today's gap up opening, Nifty will be close to 8060 resistance we had mentioned in yesterday's report. 8060 is the lower level of the big gap down opening seen on Monday.

Above 8060, 8225, the upper level of the gap mentioned above, would be the next target to eye.

Traders can initiate trading longs once the high made in first hour is taken out for the target of around 8200-8225. 7930 is the immediate support on the hourly chart, where stop losses should be placed in that case.