THIRD WEEK OF CONSOLIDATION FOR NIFTY; 8730-8540 CONTINUE TO BE THE BOUNDARIES

THIRD WEEK OF CONSOLIDATION FOR NIFTY; 8730-8540 CONTINUE TO BE THE BOUNDARIES

WORLD MARKETS

Dow and S & P 500 fell 0.24% and 0.14% respectively while Nasdaq ended marginally in the red on Friday, in the backdrop of further gains in oil prices and hawkish comments from Federal Reserve officials.

San Francisco Fed President signaled support for a rate hike in the near future in a speech.  Earlier this week, New York and Atlanta Fed presidents said a September rate hike may be on the table.

US oil rose 0.62% to $48.52 a barrel. Gold fell $11 to $1346 an ounce.

Dollar index broke 5-day losing streak to end at 94.50, up from 94.23 on the previous day.

European markets ended with cuts of 0.2%-2.2% with Italy leading the losses. Sterling fell 1% against the dollar after media reports suggested that British Prime Minister, Theresa May wanted to trigger Article 50 by next spring.

For the week, Dow lost -0.1% S & P 500 ended flat while Nasdaq gained 0.1%. European markets ended lower with FTSE, DAX and CAC down 0.8%, 1.6% and 2.2% respectively. Asia was mixed with Nikkei down -2.2% but 0.8% and 1.9% higher Hang Seng and Shanghai respectively.

                                                             

AT HOME

After gaining about a fourth of a percent in the opening trade, benchmark indices slipped a third of a percent from the top of the day to end marginally lower. Sensex settled at 28077, down 46 points while Nifty lost 6 points to finish at 8667. BSE mid-cap and small-cap indices outperformed yet again, rising half a percent each. BSE realty index fell 0.7%, becoming top loser among the sectoral indices, followed by half a percent each cut in IT, Telecom, Auto and Teck indices. Basic Material and Metal indices were the top gainers, up 1.1% and 1% respectively, followed by 0.9% higher Consumer Durable index.

For the week, Sensex lost 0.3% while Nifty was flat. Japan's Central Bank governor, in a media interaction, suggested that the Bank of Japan might cut rates further into negative territory in a bid to prop up the country's moribund economy.

FIIs net bought stocks, index futures and stock futures worth Rs 410 cr, 233 cr and 159 cr respectively. DIIs were net buyers to the tune of Rs 106 cr.

Rupee depreciated 25 paise to end at 67.06/$.

Government on Saturday named Urjit Patel, the Deputy Governor of RBI, as the successor of Raghuram Rajan. Urjit Patel will take charge as the 24th governor of RBI from 5th September. The appointment of Urjit Patel as the RBI governor is expected to result in smooth transition and continuity of the policy from the perspective of inflation targeting.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points higher start for our market.

Last week was not different in the overall scheme of things as the benchmark extended the two-week old consolidation by trading in less than 100 point range and within the 8730 hurdle and 8540 floor, which we have been mentioning as the consolidation zone.

As we have been mentioning, 8540 is the immediate previous bottom on the dally chart and 34-DMA has now moved up to 8560, which makes 8560-8540 important immediate support area to eye. On the way up 8700-8730 has been the strong supply area over last three weeks, a decisive crossover of which is required for the fresh upmove. If that happens, 8845, the top made in April 2015, would be the next target, followed by 9015 or so.

HPCL and NTPC will report their quarterly earnings today.