CONSOLIDATION CONTINUES

CONSOLIDATION CONTINUES

WORLD MARKETS                             

US indices fell 0.2%-03% on Friday, digested a weaker-than-expected employment report.

U.S. economy added 156,000 jobs last month and the unemployment rate ticked up to 5% as against expectation of 176,000 new jobs and the jobless rate to hold at 4.9%. The read was a decline from the upwardly revised 167,000 jobs in August (compared to the original number of 151,000). However, average hourly wages rose 6 cents to an annualized rate of 2.6%. The average work week also inched up one-tenth to 34.4 hours.

US oil fell 63 cents to $49.81 per barrel.

Dollar index fell to 96.48 from 97.15. U.S. Treasuries traded mixed, with the two-year note yield around 0.84% and the benchmark 10-year yield at 1.73% percent

European markets, except a 0.6% higher FTSE, fell 0.5%-1.5%.  Sterling was in focus after it nosedived as much as 6% to $1.1819 in Asian trade, hitting a fresh three-decade low in what has been described as a "flash crash." The currency later recovered to hover at the $1.24 handle.

For the week, Dow and Nasdaq fell 0.4% each and S & P 500 fell 0.7%, breaking three-week winning streak. In Europe, FTSE soared 2.1%, CAC ended falt and Dax lost 0.2%. In Asia, Nikkei and Hang Seng added about 2.5% but Shanghai fell 1%. 

AT HOME

After falling about half a percent, benchmark indices recouped most of the losses in the late noon trade to end just modestly lower. Sensex settled at 28061, down 45 points while Nifty lost 12 points to finish at 8698. BSE mid-cap and small-cap indices ended almost flat. BSE Telecom and IT indices were the top losers, down 0.9% and 0.8% respectively while Metal and Industrial indices were the top gainers, up 1% and 0.7% respectively.

FIIs net bought stocks and stock futures worth Rs 56 cr and 71 cr respectively but net sold index futures worth Rs 893 cr. DIIs were net buyers to the tune of Rs 727 cr.

Rupee appreciated 2 paise to end at 66.68/$.

OUTLOOK

Markets in Hong Kong, Japan and Taiwan are shut for public holidays, Other Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 20 points higher start for our market.

In Friday's report we had reiterated the view that 8690 was the immediate support, a sustained trading below 8690 would generate a sell on the hourly chart and would pave the way for the further correction.

The benchmark, on Friday touched a low of 8664, but recovered to close at 8698, holding on to 8690 support on closing basis.

Now 8651 is the 61.8% retracement level of the recent 8555-8807 upmove and therefore Nifty has been finding support in this 8690-8650 region for past two sessions. Once 8650 is taken out, 8555 would be the next support to eye.

Meanwhile 8800 continue to be important hurdle on the daily chart, a crossover of which will also mark a trendline breakout and would pave the way for the retest of the 8970 top made in early September.