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.