NIFTY REBOUNDS FROM 8690 SUPPORT; US JOBS REPORT IN FOCUS

NIFTY REBOUNDS FROM 8690 SUPPORT; US JOBS REPORT IN FOCUS

WORLD MARKETS                             

After falling about half a percent in the initial trade, Dow and S & P 500 recouped all the losses through the session to end near zero line ahead of key September employment report. Nasdaq lost 0.2%.

 Weekly jobless claims fell 5000 to 249,000 as against an expected figure of 257000.

US crude rose 1.2% to settle at a four-month high of $50.44 per barrel. Brent added 1.3% to $52.51.

U.S. Treasury yields rose following the release of better-than-expected weekly jobless claims data. The two-year note yield traded at 0.86%, while the benchmark 10-year yield rose to 1.74%.

Dollar index rose more than half a percent to 96.69, which is the highest level since July 28. Gold tumbled $16 to $1253 per ounce, the lowest in more than three months.

European markets, except a 0.1% higher Italy, lost 0.2%-0.5%.

AT HOME

After gaining about four tenth of a percent in the first half, benchmark indices plunged about eight tenth of a percent from the top of the day in the later half to end lower by four tenth of a percent. Sensex lost 115 points to settle at 28106 while Nifty finished at 8710, down 34 points. BSE mid-cap and small-cap indices fell 0.6% and 0.5% respectively. BSE Oil & Gas and Energy indices gained 2.6% and 1.9% respectively, becoming top gainers among the sectoral indices while Realty and Power indices were the top losers, down 1.5% and 1.2% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 354 cr, 32 cr and 74 cr respectively. DIIs were net sellers to the tune of Rs 124 cr.

Rupee depreciated 19 paise to end at 66.69/$.

The five-day spectrum auction concluded yesterday with government garnering close to Rs 65,789 crore, lower than the expectation of Rs 1 lakh crore.

The Reserve Bank of India (RBI) today released guidelines that will govern payment and small banks. RBI had granted in-principle approvals to 11 entities for setting up payments banks (PBs) in August 2015 and 10 for Small Finance Bank (SFB) in September 2015. As per the guidelines, PBs can accept deposit only up to Rs 1 lakh. Small Finance Banks will have to follow norms relating to minimum balance, inoperative accounts, nominations, and cheques/drafts.

OUTLOOK

In the early Asia trade, British pound plunged sharply to as low as $1.1819 briefly, before climbing back up to around $1.2357.

Asian markets are trading with modest cuts but SGX Nifty is suggesting about 10 points higher start for our market.

In yesterday's report we had reiterated the view that 8800 and 8690 continues to be immediate resistance and support levels respectively, a sustained crossover of either of which is required for the fresh directional view.

Nifty, after touching a high of 8781 in the morning trade, plunged sharply to 8685 but recovered somewhat towards the close to end at 8710, broadly holding 8800-8690 range.

A sustained trading below 8690 would generate a sell on the hourly chart and next support to eye in that case would be around 8600. 8800 continues to be immediate hurdle on the way up, upon crossover of which, 8890 would be the next target to eye.

Key data to eye today would be the US September non-farm payroll which could provide some insight into the timing of an interest rate hike by the U.S. Federal Reserve. According to expectations U.S. economy added 175,000 jobs and unemployment held steady at 4.9%.