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.