NIFTY AT 14-MONTH LOW; RUPEE TUMBLES TO 2-YEAR LOW

NIFTY AT 14-MONTH LOW; RUPEE TUMBLES TO 2-YEAR LOW

WORLD MARKETS                             

US markets were shut yesterday for labor day holiday.

Key European markets gained 0.6%-0.8%.

Earlier, Shanghai Composite ended lower by 2.5% after wild intraday swings. China's National Bureau of Statistics revised its annual economic growth rate for 2014 to 7.3% from the previously released figure of 7.4%.

Oil fell more than 3%, hit by weaker Chinese equities and record North Sea crude production data that added to global oversupply concerns. Brent fell $1.98 or 3.7% to $47.76 a barrel. Nymex fell $1.80 to $44.25 a barrel.

AT HOME

After gaining nearly two third of a percent in the initial trade, benchmark indices nosedived nearly two percent from the top of the day to end lower by a percent and fourth. Sensex settled at 24894, down 308 points while Nifty lost 96 points to finish at 7559. This was the lowest close for both the indices since July 2014. BSE mid-cap and small-cap indices lost 2.2% and 1.8% respectively. All the BSE sectoral indices ended in red with Healthcare and Metal indices leading the tally, down 2.6% and 2.3% respectively.

FIIs net sold stocks and index futures worth Rs 827 cr and 1087 cr respectively but net bought stock futures worth Rs 207 cr. DIIs were net buyers to the tune of Rs 504 cr.

Rupee plunged 36 paise to end at 66.82/$, marking a 2-year low.

OUTLOOK

Japan's revised GDP for the second quarter shrank an annualised 1.2%, better than the initial estimate of a 1.6% contraction.

Asian markets are trading mixed with changes of upto half a percent and SGX Nifty is suggesting about 25 points higher start for our market.

In yesterday's report we had mentioned that a breach of 7626, the low made last week, can result in second round of panic selling and next major support would come only around 7100 where the 34-month average as well as the 50% retracement level of the entire 5119-9119 upmove are placed. We had also advised holding on ot short positions with the stop loss of 7820.

The benchmark, after touching a high of 7705 in the initial trade, fell sharply to end at 7559.

We continue to maintain our bearish stance. Immediate hurdle on the hourly chart has now moved lower to 7735, which should serve as the revised stop loss for short positions.