“MY NAME IS RAGHURAM RAJAN, AND I DO WHAT I DO”

“MY NAME IS RAGHURAM RAJAN, AND I DO WHAT I DO”

WORLD MARKETS                             

US indices ended mixed yesterday with the Dow and S & P 500 rising 0.3% and 0.1% respectively on the back of gains in commodity prices while Nasdaq, pressured by persisting weakness in biotech shares and Apple, lost 0.6%.

Nymex oil rose 80 cents or 1.8% to $45.23 a barrel and copper held higher. Gold fell $5 to $1127 an ounce.

S&P/Case-Shiller's 20-City Index reported a 5% rise in July, roughly in-line with estimates. The September consumer confidence index came in at 103.0, topping August's read of 101.3.

London-listed commodity firm Glencore closed up nearly 17% in London trade, after plunging nearly 30% Monday to extend recent losses amid concerns about debt levels for the commodities and trading giant.

European markets ended with cuts of upto 0.8%. Volkswagen fell 4.1% after reports that it's push to secure tax breaks that kick-started a market for its new diesel cars could now help U.S. investigators build a case against it for deceiving the government about their emissions.

Earlier Chinese stocks fell more than 2% and Nikkei tumbled 4%.

AT HOME

After falling a percent and third in the first hour of trade, benchmark indices saw a mammoth 3% rebound from the bottom of the day on the back of a surprise 50 bps rate cut by RBI, but gave away some of the gains in last hour to end higher by six tenth of a percent. Sensex settled at 25779, up 162 points while Nifty rose 48 points to finish at 7843. BSE mid-cap index gained 0.4% while the small-cap index lost 0.1%. BSE Realty index and Bankex gained the most among the sectoral indices, rising 2% and 0.9% respectively while Metal and Healthcare indices were the top losers, giving away 1.4% and 0.9% respectively.

As against the widely expected 25 bps figure, RBI surprised the market by cutting the repo rate by 50 bps to a four-year low of 6.75%. The apex bank lowered its FY16 GDP growth target to 7.4% from 7.6% and said that the focus should now shift to bringing inflation down to 5% by FY17 end. Governor Raghuram Rajan said the RBI intends to be as accommodative as possible given its inflation targets and with this 50 basis points rate cut, he has front-loaded action.

RBI also allowed foreign investors to buy an additional $18.2 billion in government bonds in stages over the next few years, as part of measures to open up domestic markets.

FIIs net sold stocks and index futures worth Rs 1113 cr and 519 cr respectively but net bought stock futures worth rs 135 cr. DIIs were net buyers to the tune of Rs 876 cr.

Rupee appreciated 8 paise to end at 65.96/$.

State Bank of India cut base rate by 40 basis points to 9.3%, making it lowest in the country.

OUTLOOK

Today morning Asian markets are trading with gains of upto 2% with Nikkei leading the tally and SGX Nifty is suggesting about 30 points higher opening for our market.

Yesterday, Nifty, after plunging to 7691 in the initial trade, surged all the way to 7926, but gave up some gains to end at 7843. 7926 and 7691, the top and bottom made yesterday, would be the immediate resistance and support level to eye. A crossover of 7926 would take the benchmark in the vicinity of major 8100 hurdle. A breach of 7691 would open up the possibility of the retest of the 7540 bottom.

Traders are advised to wait for the breach of 7926-7691 range for taking a fresh view.

NIFTY SET FOR A PLUNGE, VINDICATING OUR BEARISH VIEW

NIFTY SET FOR A PLUNGE, VINDICATING OUR BEARISH VIEW

WORLD MARKETS                             

US indices nosedived 2%-3% on the back of sliding commodity prices and persistent worries over the health of China's economy.

Data from China showed industrial profits declined 8.7% in August from a year earlier, the largest drop since 2011.

Nymex oil slipped $1.3 or 2.8% to $44.43 a barrel and copper fell more than 1.5%. Gold settled down $14 at $1132 an ounce.

Health care fell more than 4% as the greatest decliner among all the sectors of S & P 500. Goldman Sachs plunged nearly 3.8% as the greatest weight on the Dow. Apple closed nearly 2% lower despite news that it sold more than 13 million units of the new iPhone 6s and 6s Plus models in a record first weekend of sales.

August personal income data showed an increase of 0.3% in personal income and a 0.4% increase in consumer spending, roughly in-line with estimates. August pending home sales posted a decline of 1.4%, missing expectations of a slight gain. The September Dallas Fed Survey showed manufacturing activity was flat.

European markets fell between 2.1%-2.7% as concerns over carmaker Volkswagen and mining shares continued to dent market sentiment. Shares of major European banks also came under pressure after the Swiss competition regulator said that it had opened an investigation into possible manipulation of the precious metals market by several major banks including UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui. Shell ended down 2.6% after the company said it would stop exploration activity in Alaska for the "foreseeable future."

AT HOME

After trading with a positive bias for better part of the day, benchmark indices nosedived in last hour and half to end with cuts of nearly a percent, breaking two-day winning streak. Sensex settled at 25617, down 247 points while Nifty lost 73 points to finish at 7796. BSE mid-cap and small-cap indices lost 0.2% each. BSE Metal index tumbled 2.6%, becoming top loser among the sectoral indices, followed by 1.7% each cut in Auto and Capital Goods indices. Consumer Durable and Realty indices gained 2.9% and 1% respectively.

FIIs net sold stocks worth Rs 650 cr but net bought index futures and stock futures worth Rs 9 cr and 25 cr respectively. DIIs were net buyers to the tune of Rs 506 cr.

Rupee appreciated 11 paise to end at 66.04/$.

OUTLOOK

Today morning Asian markets are trading with cuts of 1.5% to 3.5% and SGX Nifty is suggesting about 100 points lower opening for our market.

Key event to watch out today would be RBI's monetary policy review. A 25 bps cut in repo rate is widely expected and is largely discounted. The focus in that case would shift to tone of the policy to gauge the possibility of further rate cut going forward.

Readers would recall that we have maintained our negative bias on Nifty for quite some time. Even when Nifty was undergoing the rebound after making 7540 bottom, we maintained a firm opinion that this is just a pullback rally and the larger trend continues to be bearish.

The benchmark, as of yesterday, was down nearly 250 points from the top of 8055 made in the pullback rally and is set to open more than 100 point down today, vindicating our negative bias.

A gap down opening today would break the 7723 bottom made last week and a sustained trading below that would open up the possibility of the retest of the 7540 bottom.

8050-8100 IS THE RESISTANCE AREA; 7723 IMMEDIATE SUPPORT

8050-8100 IS THE RESISTANCE AREA; 7723 IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices ended mixed on Friday with Dow gaining 0.7%, S & P 500 closing flat while Nasdaq, pressured by a plunge in biotech shares, lost 0.7%. Dow was supported by a 9% surge in Nike, which reported earnings that beat on both the top and bottom line, higher prices and strength in the China market.

The second revision for second-quarter GDP was revised higher to 3.9%, boosted by stronger consumer spending and construction. Consumer sentiment fell for the third straight month in September to 87.2, the lowest in nearly a year.

Nymex oil rose 1.7% to $45.70 a barrel. Gold fell $8.20 to $1146 an ounce.

European markets surged 2.5%-3.7% as concerns over the health of the global economy dimmed slightly after the Fed Chair Yellen, in a speech on Thursday, suggested it was still on course to raise interest rates in 2015.

For the week, Dow lost 0.4%, S & P 500 fell 1.4% and Nasdaq plunged 2.9%. European markets, except a marginally higher FTSE, lost 0.8%-3.3% with Spain and Germany leading the tally.

AT HOME

After falling nearly half a percent in the initial trade, benchmark indices rallied nearly eight tenth of a percent from the bottom of the day to end with modest gains on the expiry day of the September derivative series. Sensex settled at 25863, up 40 points while Nifty gained 23 points to finish at 7868. BSE mid-cap and small-cap indices gained 0.2% and 0.6% respectively. BSE IT and Consumer Durable indices gained the most among the sectoral indices, rising 2% each while Metal and Capital Goods indices were the top losers, giving away 1.4% and 1.1% respectively.

FIIs net sold stocks and index futures worth Rs 115 cr and 632 cr respectively but net bought stock futures worth Rs 39 cr. DIIs were net buyers to the tune of Rs 51 cr.

Rupee depreciated 18 paise to end at 66.16/$.

The government on Thursday notified the applicability of minimum alternate tax (MAT) on foreign companies that don't have any permanent establishment in India. This clarification puts the MAT controversy to rest as all foreign investors without business presence in India - foreign portfolio investors and companies - are now exempt from MAT, irrespective of whether tax treaties exist between India and other countries where these firms may be domiciled.

OUTLOOK

Hong Kong, Korea, and Taiwan are shut today. Shanghai and Nikkei are down about 1.5% and 1% respectively. SGX Nifty is trading around 7890, which is about the same level as Thursday's close of Nifty October future, suggesting a flattish open for our market.

As mentioned in Thursday's report, 7925 continues to be immediate hurdle on the hourly chart. On the way down, 7723, the low made last week, is the immediate support, a breach of which would open up the possibility of the retest of the 7540 bottom.

BEML, Cadila, Bharti Infratel, Marico, NCC and TV18 will start trading in derivative segment from today.

NIFTY REBOUNDS AFTER ACHIEVING 7736 TARGET; 7925 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER ACHIEVING 7736 TARGET; 7925 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices ended with modest cuts after a choppy trade, with materials shares among the hardest-hit for the second session as bleak factory activity data out of the world's top two economies added to growth fears.

China's flash Caixin purchasing managers' index (PMI) for September fell to a six-and-a-half-year low of 47.0 in September. Markit's preliminary US manufacturing PMI for September remained unchanged month-in-month at 53, which was the weakest reading in almost two years.

Energy stocks were pressured as Nymex oil settled down $1.88 or 4.1% at $44.48 a barrel despite initially spiking on a report that US crude inventories fell by 1.9 million barrels.

At the beginning of a visit to the United States this week, Chinese President Xi Jinping said Tuesday that China's financial markets will remain stable. Xi added yesterday that his country was fully capable of maintaining a relatively high growth rate for a long time to come.

Earlier, Shanghai composite ended lower by more than 2%.

European markets, except a 0.8% lower Spain, gained between 0.2%-1.6% with FTSE leading the tally. Eurozone composite PMI for September came at 53.9, down from 54.3 in August and below expectations for a reading of 54.1.

AT HOME

After falling more than a percent in the initial trade, benchmark indices saw a mammoth one and a half percent recovery from the bottom of the day to end higher by nearly half a percent. Sensex settled at 25823, up 171 points while Nifty gained 34 points to finish at 7846. BSE mid-cap and small-cap indices gained 0.5% and 0.7% respectively. Except a 0.3% and 0.03% cut in BSE Power and Teck indices respectively, all the sectoral indices ended in green with Consumer Durable index and Bankex leading the tally, up 1.7% and 1.5% respectively.

FIIs net sold stocks and stock futures worth Rs 1330 cr and 263 cr respectively but net bought index futures worth Rs 173 cr. DIIs were net buyers to the tune of Rs 891 cr.

Rupee depreciated 10 paise to end at 65.975/$.

OUTLOOK

Nikkei, after a five day weekend has opened with cut in the vicinity of a percent and half today. Other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points lower opening for our market.

In yesterday's report we had mentioned that next downside target to eye is 7736, which is the 61.8% retracement level of the 7540-8055 upmove and that a sustained trading below 7736 would open up the possibility of the retest of the 7540 bottom.

Nifty touched a low of 7723 in the initial trade and saw a smart rebound from there to end at 7846.

7736 continues to be immediate support, a sustained trading below which will open up the possibility of the retest of 7540 bottom as mentioned above. On the way up 7925 continues to be immediate hurdle, above which 8100 would be the major hurdle to eye.

SHARP PLUNGE IN NIFTY VINDICATES OUR CAUTION

SHARP PLUNGE IN NIFTY VINDICATES OUR CAUTION

WORLD MARKETS                             

US indices fell 1.1%-1.5% yesterday, weighing declines in oil, concerns about global growth, and the implications of the Federal Reserve's rate hike decision.

Materials shares were among the hardest-hit due to a sell-off in commodities on the back of lingering worries about a slower-growing China. Nymex oil settled down 85 cents or 1.8% at $45.83 a barrel. Copper slumped more than 3.5% after the Asian Development Bank cut its growth forecast for China.

Biotech shares extended losses into a second day after U.S. Democratic presidential candidate Hillary Clinton said she would propose a monthly cap of $250 on prescription drugs.

Auto stocks were under pressure following news that Volkswagen would make a provision of $7.3 billion after allegations it cheated on vehicle emission tests.

The July US Federal Housing Finance Agency's home price index showed an increase of 0.6%.

European markets tumbled 2.8%-3.8%. Volkswagen collapsed nearly 20%—following declines of 18% on Monday—on the news that it could face an $18 billion fine in the U.S. for rigging emission tests on its diesel vehicles. Other Auto stocks also came under pressure after French Finance Minister called for a Europe-wide probe into the industry.

Dollar index edged higher with the euro near $1.11. Gold settled at $1125 an ounce, down $8.

AT HOME

After trading with a positive bias in the morning trade, benchmark indices nosedived in the noon trade on the back of sell-off in European markets to end with deep cuts of more than 2%. Sensex sank 541 points to settle at 25652 while Nifty finished at 7812, down 165 points. BSE mid-cap and small-cap indices lost 1.9% and 1.6% respectively. All the BSE sectoral indices ended in red with Metal index leading the tally, giving away 4.2%, followed by 3.1% each cut in Capital Goods and Power indices.

FIIs net sold stocks and index futures worth Rs 1052 cr and 697 cr respectively but net bought stock futures worth Rs 1248 cr. DIIs were net buyers to the tune of Rs 378 cr.

Rupee depreciated 16 paise to end at 65.875/$.

The Asian Development Bank (ADB) yesterday lowered growth projections for India for the current fiscal to 7.4%, from the 7.8% earlier, citing weak monsoon, poor external demand and inability of the government to push economic reforms in Parliament.

OUTLOOK

China's September Caixin flash manufacturing PMI has come in at 47, which is down from 47.1 in August and weakest since 2009.

Asian markets are trading with cuts of 1-2.5% and SGX Nifty is suggesting about 60 points lower opening for our market.

For past two-three sessions we had been cautioning that the recent rebound is just a pullback and the medium term trend continues to be down. We had also said that after a 500 point pullback, Nifty was closer to important resistance levels placed in the vicinity of 8100 and had advised building fresh longs only above that level.

Yesterday, the benchmark, after touching a high of 8022, plunged sharply to end at 7812, vindicating our view.

Yesterday's steep fall also generated a sell on the hourly chart and next downside target to eye is 7736, which is the 61.8% retracement level of the 7540-8055 upmove. A breach of 7736 would open up the possibility of the retest of the 7540 bottom.

Stay short with the stop loss of 7925, which is the immediate hurdle on the hourly chart.

BROADER MARKET OUTPERFORMS WHILE NIFTY CONSOLIDATES

BROADER MARKET OUTPERFORMS WHILE NIFTY CONSOLIDATES

WORLD MARKETS                             

Dow and S & P 500 gained 0.8% and 0.5% respectively while Nasdaq, weighed by a plunge in biotechnology plays on the back of renewed controversy over large price increases on some drugs, ended marginally higher in yesterday's trade.

After a media report of a firm raising the price of a 62-year-old drug from $13.50 a tablet to $750 overnight, Hillary Clinton tweeted that she would outline a plan Tuesday to take on price gouging.

Atlanta Fed President Dennis Lockhart said that the Federal Reserve's decision to delay an interest rate increase last week was largely a "risk management" exercise to be sure recent market volatility would not become a drag on the U.S. economy and that he still expects the Fed to raise rates this year. St. Louis Federal Reserve President James Bullard said he would have dissented on the central bank's decision to hold rates low.

August existing home sales fell more than expected to an annual rate of 5.31 million, a 4.8% drop.

Dollar index gained a percent, with the euro below $1.12. Nymex oil rose $2 or 4.5% to $46.68 a barrel.

European markets ended with gains of upto 1.1%.

German carmaker Volkswagen (VW) plunged nearly 19% after news that the company could be fined up to 18 billion euros ($20.3 billion) by U.S. authorities for misleading buyers about emissions. In Greece, Alexis Tsipras is once again prime minister after a decisive victory in a snap election on Sunday. There are hopes his clear win will pave the way for reforms that are a pre-requisite of the country's third 85 billion euro ($96.2 billion) bailout.

AT HOME

After falling nearly a percent in the initial trade, benchmark indices recouped all the losses through the session to end little changed. Sensex settled at 26193, down 26 points while Nifty lost 5 points to finish at 7977. BSE mid-cap and small-cap indices gained 0.4% and 1.2% respectively. BSE Power index and Bankex gained the most among the sectoral indices, rising 1.1% and 0.8% respectively whereas FMCG and Oil & Gas indices were the top losers, down 0.8% and 0.3% respectively.

FIIs net bought stocks and stock futures worth Rs 155 cr and 317 cr respectively but net sold index futures worth Rs 1836 cr. DIIs were net buyers to the tune of Rs 104 cr.

Rupee depreciated 5 paise to end at 65.72/$.

OUTLOOK

Today morning Asian markets are trading with modest gains and SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had said that the recent rebound is just a pullback and the medium term trend continues to be down and had advised building fresh longs only above 8092, where the previous top on the daily chart as well as the 34-DMA are placed.

That continues to be the view. One should wait for the crossover of 8092 for taking fresh positive view on Nifty. Immediate support continues to be around 7860, a breach of which will result in resumption of the downtrend.

FED DECISION REIGNITES GLOBAL GROWTH CONCERNS; NIFTY RETREATS FROM THE VICINITY OF IMPORTANT HURDLE

FED DECISION REIGNITES GLOBAL GROWTH CONCERNS; NIFTY RETREATS FROM THE VICINITY OF IMPORTANT HURDLE

WORLD MARKETS                             

US indices plunged 1.4%-1.7% on Friday after the Federal Reserve's overnight decision to hold interest rates at record lows fanned worries about the health of the global economy.

Dollar index jumped nearly a percent, with the euro falling below $1.13.

Treasury yields extended Thursday's decline, with 10-year note yields trading around 2.13%, while two-year yield held near 0.67%. Gold gained $21 to $1138 an ounce. Nymex oil plunged 4.73% or $2.22 to settle at $44.68 a barrel.

Earlier Shanghai Composite gained 0.42% while Nikkei lost 2%.

European markets tumbled 1.3%-3.1% with DAX leading the tally.

For the week, Dow and S & P 500 ended mildly lower while Nasdaq gained 0.1%. European markets lost 0.2%-2%.

In Greece, Prime Minister-elect Alexis Tsipras claimed victory in the country's general elections on Sunday and will return to power in a coalition government with the right-wing Independent Greeks.

AT HOME

After climbing nearly 2% in the morning trade, benchmark indices gave away half of the gain in the noon trade to end higher by a percent. Sensex settled at 26219, up 255 points while Nifty gained 83 points to finish at 7982. BSE mid-cap and small-cap indices gained 0.9% and 1.1% respectively. BSE Realty index and Bankex soared 3.2% and 2.7% respectively, becoming top gainers among the sectoral indices while FMCG and Consumer Durable indices lost 0.6% and 0.2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 644 cr, 470 cr and 1090 cr respectively. DIIs were net buyers to the tune of Rs 415 cr.

Rupee soared 78 paise to end at 65.67/$.

OUTLOOK

Today morning Nikkei is closed, other Asian markets are trading with cuts of 1%-2% and SGX Nifty is suggesting about 80 points lower opening for our market.

Ever since Nifty took out immediate hurdle of 7850, we had been working with target of 7965. In Friday's report we had mentioned that above 7965, 8092, the top made on 28th August would be the next target to eye.

The benchmark on Friday surged all the way to 8055 but witnessed severe profit booking and ended at 7982.

We however believe that the rebound seen over past eight sessions is just a pullback and the medium term trend continues to be down.

Immediate support on the hourly chart has moved up to 7860, a breach of which will generate sell on the hourly chart and can result in resumption of the downmove.

We had advised booking profit in trading longs on Friday and would advise building fresh longs only above 8092, where the previous top on the daily chart as well as the 34-DMA are placed.

FED STAYS PUT; NIFTY ON TRACK TO ACHIEVE 7965 TARGET

FED STAYS PUT; NIFTY ON TRACK TO ACHIEVE 7965 TARGET

WORLD MARKETS                             

Dow and S & P 500 ended lower by nearly a third of a percent and Nasdaq gained 0.1% after digesting the Federal Reserve's rate decision and Fed Chair Janet Yellen's press conference.

Fed kept interest rates unchanged, citing concerns about global economic growth. Fed Chair Yellen reiterated at the subsequent press conference that the path of a rate hike is more important than the timing of the first one.

Treasury yields extended losses, with the 10-year yield at 2.19%. The 2-year yield fell to 0.68%, wiping out its gains for the week. Dollar index fell about 1%.

Crude settled down 25 cents at $46.90 a barrel after surging 5.7% Wednesday.

European markets, except a 0.7% lower FTSE, ended with modest gains.

Earlier, the Shanghai Composite closed down 2.08% amid volatility, while Japan's Nikkei finished 1.43% higher.

AT HOME

After a positive start, benchmark indices added some more gains through the session to end higher by nearly a percent. Sensex settled at 25964, up 258 points while Nifty rose 70 points to finish at 7899. BSE mid-cap and small-cap indices however lost 0.2% and 0.4% respectively. BSE Bankex soared 1.4%, becoming top gainer among the sectoral indices, followed by 0.7% rise in Power index. Consumer Durable and Oil & Gas indices were the top losers, down 1.4% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 337 cr and 50 cr respectively but net bought stock futures worth Rs 1038 cr. DIIs were net buyers to the tune of Rs 424 cr.

Rupee depreciated 9 paise to end at 66.455/$.

The Reserve Bank of India (RBI) yesterday granted an in-principle nod to 10 applicants for small finance banks. Small bank should have 75% of its adjusted net bank credit to be extended to priority sector and it should have at least 25 branches in unbanked rural areas.

OUTLOOK

Today morning Nikkei is down more than a percent while other Asian markets are trading mixed with modest changes. SGX is trading at 7960, suggesting a 60 point higher opening for our market compared to Wednesday's close of Nifty future.

Ever since Nifty crossed 7850 hurdle, we have been working with an upside target of 7965, which is the 61.8% retracement level of the entire 8655-7540 fall seen since July end. Above 7965, 8092, the top made on 28th August, would be the next upside target to eye.

After today's gap up opening, immediate support on the hourly chart would have moved up to 7820, which should serve as the stop loss for trading longs. Some profit booking is advised around 7965.

STAY LIGHT AHEAD OF THE BIG FED DECISION

STAY LIGHT AHEAD OF THE BIG FED DECISION

WORLD MARKETS                             

US indices soared 1.2%-1.4% yesterday, eyeing some of the final data reports leading into the Federal Reserve's highly-anticipated two-day meeting that kicks off on today.

August retail sales showed an increase of 0.2%, missing expectations of a 0.3% gain. Ex-autos, the figure increased 0.1%. July retail sales were revised up to 0.7% from 0.6%. August industrial production data showed a decline of 0.4%, worse than the expected 0.2% drop. The Empire State Manufacturing Survey came in at negative 14.7 for September, versus August's read of negative 14.9.

Nymex oil gained 1.3% to settle at $44.59 a barrel.

Treasury yields jumped, with the 10-year yield at 2.28% and the 2-year yield hitting a four-year high of 0.80%.

Earlier, Shanghai Composite closed down 3.55% as concerns about China's economic outlook continued to take a toll.

European markets reversed early losses to end with gains of 0.6%-1.6%. Closely-watched German ZEW economic sentiment index dropped to 12.1 points in September from 25.0 points in August, with weakening emerging markets dampening the outlook for the euro zone's biggest economy. Data from the Association of European Automobile Manufacturers showed new car registrations rose 11.5% year-on-year in August.

AT HOME

Benchmark indices ended lower by six tenth of a percent in today's trade, breaking the two-day winning streak. Sensex settled at 25706, down 151 points while Nifty lost 43 points to finish at 7829. BSE mid-cap and small-cap indices lost 0.6% and 0.8% respectively. Except a 0.8% and 0.03% rise in BSE FMCG and IT indices respectively, all the BSE sectoral indices ended in red with Metal and Capital Goods indices leading the tally, down 2.3% and 2.1% respectively.

FIIs net sold stocks worth Rs 911 cr but net bought index futures and stock futures worth Rs 257 cr and 349 cr respectively. DIIs were net buyers to the tune of Rs 481 cr.

Rupee depreciated 4 paise to end at 66.3625/$.

India's trade deficit for the month of August stood almost flat at USD 12.48 bn against USD 12.81 bn month-on-month. Imports dipped 10% to USD 33.74 bn. Export fell 8% at USD 21.27 bn, the lowest level since October 2010.

OUTLOOK

Today morning, Asian market, except a marginally lower Shanghai, are trading with gains of upto a percent and half and SGX Nifty is suggesting about 70 points higher opening for our market.

In yesterday's report we had reiterated the upside target of 7965 and had recommended a stop loss of 7770 for trading longs. These continue to be relevant levels for today.

However, considering the fact that we are closed tomorrow ahead of the big Fed decision, traders would do well to lighten trading positions.

There are various combinations being speculated. Whether there is no tightening and indication of continued data dependency, or no tightening and some signal pointing to a December move and finally a tightening and a dovish signal to control the longer-term rate market. Currently markets are working with possibility of the second one.

An interest-rate increase by the Fed will cause emerging-markets currencies to weaken as the prospect of higher returns on dollar-denominated assets lures investors back to the U.S. Further capital flight could deflate equity and bond prices around the emerging world.

7770 IS THE IMMEDIATE SUPPORT; 7965 UPSIDE TARGET

7770 IS THE IMMEDIATE SUPPORT; 7965 UPSIDE TARGET

WORLD MARKETS                             

US indices ended lower by four tenth of a percent on persisting Chinese growth concerns and caution ahead of the key Fed meeting.

Shanghai Composite plunged 2.7% amid weaker-than-expected August reports on investment and factory output that added to concerns of significant slowdown in the world's second-largest economy. However, the official retail sales numbers topped expectations, showing a 10.8% y-o-y increase.

Nymex crude fell 63 cents or 1.41% at $44 a barrel, pressuring energy stocks.

European markets, except a marginally higher DAX, lost 0.4%-1%.

AT HOME

After a flattish start, benchmark indices saw a sustained northward move through the session to end higher by a percent. Sensex settled at 25857, up 246 points while Nifty climbed 83 points to finish at 7872. BSE mid-cap and small-cap indices gained 1.3% and 0.9% respectively. Except a 0.1% cut in BSE Consumer Durable index, all the sectoral indices closed higher, with Metal and Power indices leading the tally, up 2.7% and 2.5% respectively.

FIIs net bought stocks and stock futures worth Rs 59 cr and 488 cr respectively but net sold index futures worth Rs 34 cr. DIIs were net buyers to the tune of Rs 184 cr.

Rupee appreciated 21 paise to end at 66.325/$.

India's wholesale price inflation, as measured by WPI came in at negative 4.95% for August as against negative -4.05% in July, marking the tenth straight month of deflation.

The consumer price index (CPI) based inflation for August came in at 3.66%, a tad above expectation and reading of 3.69% in July.

Rupee appreciated 21 paise to end at 66.325/$.

In a bid to protect the domestic steel sector that is grappling with problems of low demand, the finance ministry yesterday notified a 20% provisional safeguard duty on certain categories of the metal. -

OUTLOOK

Today morning Nikkei is up about a percent, Hang Seng is almost flat. Other Asian markets are in red with China topping the tally with near 2% cut. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that 7850 is the immediate hurdle on the hourly chart, a sustained trading above which will open up the space for the further upside till 7965, which is the 38.2% retracement level of the entire 8655-7540 fall.

The benchmark climbed 83 points to settle at 7872, crossing the 7850 hurdle decisively. 7965 continues to be the upside target to eye. Immediate support on the hourly chart has moved up to 7770, which should serve as the stop loss for trading longs. 

WORLD EQUITIES START CRUCIAL WEEK ON A QUIET NOTE; CPI IN FOCUS AT HOME

WORLD EQUITIES START CRUCIAL WEEK ON A QUIET NOTE; CPI IN FOCUS AT HOME

WORLD MARKETS                             

After opening with cuts of about half a percent, US indices saw a sustained northward move through the session to end with gains in the vicinity of half a percent on Friday ahead of this week’s key Fed meeting.

Energy stocks however ended down as Nymex oil fell $1.29 or 2.81%, at $44.63 a barrel on a Goldman Sachs cut on oil price forecasts.

Preliminary September consumer sentiment came in at 85.7, the lowest since September 2014 and below expectations of 91.2. The final read for August was 91.9.  Producer Price Index (PPI) for August came in unchanged, mildly beating expectations for a 0.1% decline. The core PPI was up 0.7% in the 12 months through August.

European markets fell 0.6%-1.2%.

For the week, Dow and S & P 500 gained 2% each and Nasdaq climbed 3%.European markets, except a 0.8% lower Spain, gained between 0.6%-1.4%.

AT HOME

After climbing nearly a percent in the opening trade, benchmark indices gave away all the gains through the day to end almost flat. Sensex settled at 25610, down 12 points while Nifty ended 1 point higher at 7789. BSE mid-cap and small-cap indices gained 0.2% and 0.6% respectively. BSE Metal index plunged 1.5%, becoming top loser among the sectoral indices, followed by 0.5% cut in Capital Goods index. Realty and IT indices were the top gainers, up 0.7% and 0.4% respectively.

FIIs net sold stocks worth Rs 754 cr but net bought index futures and stock futures worth Rs 240 cr and 442 cr respectively. DIIs were net buyers to the tune of Rs 411 cr.

Rupee depreciated 11 paise to end at 66.5374/$.

For the week, Sensex and Nifty gained 1.8% and 1.6% respectively, breaking the four-week losing streak.

India's industrial activity, as measured by the IIP, for the month of July jumped to 4.2% y-o-y from 4.4% (revised) in June.

India's current account deficit in the April-June quarter narrowed to USD 6.2 billion, or 1.2% of gross domestic product, from USD 7.8 billion, or 1.6% of GDP a year earlier.

OUTLOOK

Data released yesterday showed growth in China's fixed-asset investment and industrial production missed expectations in August, suggesting further cooling in the world's second-biggest economy that will likely prompt the government to roll out more support measures. Retail sales however grew at better-than-estimated 10.8% rate.

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 25 points higher opening for our market.

As mentioned in Friday's report, 7700-7680 continues to be immediate support area with the stop loss of which trading longs can be held on to.

On the way up, upon sustained trading above 7850, next target to eye would be 7965, which is the 38.2% retracement level of the entire 8655-7540 fall.

India's retail inflation, as measured by CPI, would be released today evening and is expected to show a reading of 3.49% as against 3.78% in July. Core CPI is estimated unchanged at around 4.3%.

WPI for August would also be released today noon and is expected to show a reading of negative 4.43% as against -4.05% in the previous month.