WORLD EQUITIES CHEER BOJ, FED OUTCOME; NIFTY SET TO CHALLENGE 8860 HURDLE

WORLD EQUITIES CHEER BOJ, FED OUTCOME; NIFTY SET TO CHALLENGE 8860 HURDLE

WORLD MARKETS                             

US indices soared 0.9%-1.1% after the Federal Reserve kept interest rates unchanged but hinted at the possibility of one rate hike later this year. The Nasdaq composite hit a fresh all-time intraday high, and closed at a new all-time high.

In its post-meeting statement, Fed expressed confidence in economic growth, but not enough to make a move this month. They also lowered their expectations for rate hikes in the years ahead, suggesting two hikes in 2017 and three each in 2018 and 2019.

Dollar index, after touching a high of 96.33, eased to end at 95.50, the previous close being 96. Gold rose $13 to $1335 an ounce.

US oil climbed nearly 3% to $45.34 after data from the U.S. Energy Information Administration (EIA) showed crude inventories fell 6.2 million barrels in the previous week, compared to expectation of a 3.4 million build. Brent rose 2% to $46.83.

European markets saw gains of upto 0.9%

Earlier, Nikkei soared nearly 2% and yield on the 10-year Japanese government bond rose into positive territory for the first time since March after the Bank of Japan announced it would change policy, abandoning its monetary base target in favor of targeting the yield curve for Japanese bonds. It held the deposit rate unchanged at -0.1% and said it would maintain its program of bond purchases.

AT HOME

After gaining more than half a percent in the morning session, benchmark indices gave away all the gains in the noon trade to end little changed. Sesex settled at 28507, down 16 points while Nifty rose 1 point to finish at 8777. BSE mid-cap index lost 0.1% but the small-cap index added 0.2%. BSE Telecom index was the top gainer among the sectoral indices, rising 1.5%, followed by 0.8% rise in Consumer Durable index. FMCG and Power indices fell 0.6% and 0.2% respectively, becoming top losers.

FIIs net bought stocks and index futures worth Rs 184 cr and 444 cr respectively but net sold stock futures worth Rs 502 cr. DIIs were net sellers to the tune of Rs 231 cr.

Rupee depreciated 1 paise to end at 67.01/$.

India’s current account deficit (CAD) narrowed sharply to just USD 300 million, or 0.1% of GDP, in the June quarter, driven by lower trade deficit on deeper import contraction. CAD had stood at a high of USD 6.1 billion, or 1.2% of GDP, in the year-ago period.

IDFC Bank, DCB Bank and Torrent Power will be included in the derivative segment of NSE from September 30.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.4%-1.4% with Hang Seng on the top and SGX Nifty is suggesting about 50 points higher start for our market.

Yesterday, Nifty, after touching a high of 8827, eased to end at 8777, extending the consolidation within the 8690-8860 range we have been talking for past couple of days.

A gap up opening today would take the benchmark back near the high made yesterday.

8860, the upper level of the gap created by the big gap-down opening last Monday, continues to be immediate hurdle to eye, above which 8970, the top made earlier this month, would be the next big resistance to eye. 8690, the bottom made last week, continues to be important immediate support.

Meanwhile, 8750 is where a double-bottom on the hourly chart is placed and traders can use this level as the stop-loss in long positions once they are initiated if Nifty is able to take out 8960 hurdle.