NIFTY REBOUNDS FROM CRUCIAL 8540 SUPPORT; EXTENDS CONSOLIDATION

NIFTY REBOUNDS FROM CRUCIAL 8540 SUPPORT; EXTENDS CONSOLIDATION

WORLD MARKETS                             

US indices gained between 0.3%-0.6% with financials and materials leading.

Consumer spending rose 0.3% in July, in line with expectations.

US oil fell 1.4% to $46.98 a brrel and Brent was off 1.3% at $49.26.

US treasuries gained, with the two-year note yield near 0.81% and the benchmark 10-year yield around 1.56%. Dollar index, after touching a high of 95.83, reversed to end at 95.56, the previous close being 95.48.

European markets fell 0.4%-1.1%, reacting to hawkish comments from U.S. Federal Reserve Chair Janet Yellen on Friday and resultant dollar strength.

AT HOME

After falling about a third of a percent in the initial trade, benchmark indices spiked up nearly three fourth of a percent from the bottom of the day to end higher by four tenth of a percent, breaking the two-day losing streak. Sensex settled at 27903, up 120 points while Nifty added 35 points to finish at 8607. BSE mid-cap and small-cap indices gained 0.5% and 0.1% respectively. BSE Auto, Industrial and Energy indices climbed 1.4% each, becoming top gainers among the sectoral indices while IT index fell 0.9%, becoming top loser, followed by 0.8% each cut in Telecom and Realty indices.

FIIs net bought stocks, index futures and stock futures worth Rs 287 cr, 41 cr and 407 cr respectively. DIIs were net buyers to the tune of Rs 17 cr.

Rupee depreciated 11 paise to end at 67.17/$.

OUTLOOK

Today morning Asian markets are trading with gains of upto 0.7% and SGX Nifty is suggesting about 35 points higher start for our market.

In yesterday's report we had mentioned that 8540, where the lower band of bollinger on daily chart is placed, is the final hope for the bulls, a decisive breach of which will turn the outlook negative for the near term.

Bulls managed to defend this level as Nifty, after touching a low of 8544, rebounded smartly to close at 8607 and is set to open higher today.

After today's gap up opening, Nifty will be closer to the upper level of the 8730-8540 consolidation range, in which it has been stuck for the whole of August. A decisive crossover of this range, as we have been mentioning, is required to take a fresh directional view.

Meanwhile "Stay light on Nifty and concentrate on individual stocks" continues to be the advise.