NIFTY NEARS 8690 TARGET AFTER BREACHING 8790 SUPPORT; 8810 IS THE IMMEDIATE HURDLE

NIFTY NEARS 8690 TARGET AFTER BREACHING 8790 SUPPORT; 8810 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices fell 0.9% each yesterday, keeping an eye on an informal OPEC meeting in Algeria and looked ahead to the first U.S. presidential debate. Financials and health care lead the losses.

US crude rose 3.3% to $45.93 a barrel and Brent added 3.2% to $47.35  after media reports cited the Algerian energy minister saying all options were possible for an output cut or freeze and that OPEC oil ministers will "not come out empty-handed" from the meeting.

European markets saw cuts of 1.3%-2.2%. Shares of Deutsche Bank plunged 7.5% to hit an all-time low after German Chancellor Angela Merkel had reportedly ruled out helping the bank with its U.S. legal troubles. 

Back in the US First televised debate between the two presidential candidates Hillary Clinton and Donald Trump is scheduled for 6.30 am IST.

AT HOME

After a modestly lower start, benchmark indices saw a sustained downward move through the session to end with deep cuts of nearly a percent and fourth. Sensex lost 374 points to settle at 28294 while Nifty finished at 8723, down 108 points. BSE mid-cap and small-cap indices lost half a percent each. BSE Realty index cracked 2%, becoming top loser among the sectoral indices, followed by 1.8% cut in Telecom index. Energy index gained 0.4%, followed by 0.1% each rise in Metal and Oil & Gas indices.

FIIs net sold stocks, index futures and stock futures worth Rs 206 cr, 1121 cr and 686 cr respectively. DIIs were net sellers to the tune of Rs 113 cr.

Rupee appreciated 5 paise to end at 66.60/$.

OUTLOOK

Today morning, Nikkei is down about half a percent, Hang Seng is up about half a percent and other Asian markets are trading in between. SGX Nifty is suggesting a flattish start for our market.

In yesterday's report we had mentioned that "8790 continues to be the immediate support, a sustained trading below which would generate a sell on the hourly chart and can take Nifty to 8690".

The benchmark broke 8790 support in the first hour itself and plunged all the way to 8715 before closing at 8723.

8690, the bottom made in the middle of September, continues to be important support to eye, a close below which would confirm a lower-top lower-bottom formation on the hourly chart and would pave the way for further correction. 8540, the bottom made towards the end of August, would be the next downside target to eye if that happens.

8810 is the immediate hurdle on the hourly chart above which 8893, the top made last week, would be the bigger resistance to eye.

Traders can hold short positions with the stop-loss of 8810.