9860-9685 IS THE IMMEDIATE RANGE

9860-9685 IS THE IMMEDIATE RANGE

WORLD MARKETS                             

After rising sharply on Monday, Dow and S & P 500 ended flat yesterday while Nasdaq ended marginally in the red.

Banking stocks, dollar and yields rose following the strong economic data. Retail sales jumped 0.6% in July, more than the expected increase of 0.4%. Retail sales for the month of June were revised upwards to reflect a 0.3% gain from a previously recorded 0.2% decline. Import prices rebounded after two straight months of declines, advancing 0.1%. The Empire State manufacturing index spiked to 25.2 in August from just 9.8 in July.

The benchmark 10-year yield rose to 2.26%. Dollar index rose about half a percent to 93.83.

Gold fell $11 to $1280 per ounce.

European markets gained 0.1%-0.4%

US markets had risen sharply on Monday after North Korean leader Kim Jong Un said he would wait for further action out of the U.S. before making a decision surrounding a missile strike on Guam.

AT HOME

Benchmark indices gained eight tenth of a percent on Monday, breaking 5-day losing streak. Sensex added 235 points to settle at 31449 while Nifty finished at 9794, up 83 points. BSE mid-cap and small-cap indices climbed 2.5% each. Except a 0.6% and 0.4% lower IT and Teck indices respectively, all the BSE sectoral indices ended in green with Realty and Metal indices leading the tally, up 6% and 3.5% respectively.

FIIs net sold stocks and index futures worth Rs 1639 cr and 453 cr respectively but net bought stock futures worth Rs 571 cr. DIIs were net buyers to the tune of Rs 1619 cr.

Rupee appreciated 2 paise to end at 64.12/$.

India's wholesale inflation in July inched up to 1.88% from 0.90% in June due to an increase in foods articles and vegetable prices. Retail inflation too rose to 2.36% in July from 1.54% in June.

OUTLOOK

Today morning, Asian markets are trading mixed and SGX Nifty is suggesting a flattish start for our market.

In Monday's report we had mentioned that last week's close, 9711, also coincides with the 61.8% retracement level of the 9450-10140 upmove seen since 30th June and hence is an important support to eye.

We had also said that 9860, the 38.2% retracement level of the recent fall, which also coincides with the 34-DMA, is the immediate hurdle, a crossover of which is required for a fresh upmove. 

Nifty on Monday soared 83 points to settle at 9794.

9860 continues to be important immediate hurdle, a crossover of which is required for a fresh upmove. If that happens, 9965, the 61.8% retracement level of the recent fall, would be the next hurdle to eye.

9685, the bottom made last week, continues to be important support, a breach of which will open up the possibility of the retest of 9450 bottom made on 30th June.

Traders are advised to wait for the breach of 9860-9685 range, on either side, for taking a fresh directional view.