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.