EQUITIES, RUPEE REBOUND SMARTLY; 11460 IS THE HURDLE FOR NIFTY

EQUITIES, RUPEE REBOUND SMARTLY; 11460 IS THE HURDLE FOR NIFTY

WORLD MARKETS

US indices gained 0.5%-0.8% as Apple rose and fears of rapidly rising inflation were tempered.

US consumer price index rose 0.2% last month, the expected figure being 0.3%.

After reports on Wednesday said the U.S. was seeking to restart trade negotiations with China, Trump, in a tweet yesterday said, that Washington was "under no pressure to make a deal with China, they are under pressure to make a deal with us." He added that the U.S. "will soon be taking in Billions in Tariffs & making products at home."

US oil fell 2.5% to $68.62 and Brent dipped 1.7% to $78.35 a barrel, suffering their largest single day percentage decline in almost a month, after The International Energy Agency warned that global economic risks were mounting.

Dollar index fell about 0.3% to 94.54, extending the losing streak to fourth straight day.

In Europe, FTSE and Italy fell 0.4% and 0.5% respectively while DAX was up 0.2%. the European Central Bank decided to kept its benchmark interest rates unchanged , which was widely expected.  The Bank of England (BoE) decided to hold interest rates, with all rate-setters voting unanimously to hold rates at 0.75%, as expected.

Turkish central bank increased its benchmark rate to 24%, a hike of 625 basis points from the previous rate of 17.75%. The Turkish lira rose sharply against the dollar following the decision.

AT HOME

After falling about a third of a percent in the first half, benchmark indices saw a sharp rebound later to end higher by about eight tenth of a percent, breaking two-day losing streak. Sensex settled at 37718, up 305 points while Nifty added 82 points to finish at 11370. BSE mid-cap index rose 0.5% but small-cap index fell 0.3%. BSE FMCG index soared 2.4%, becoming top gainer among the sectoral indices, followed by 1.5% higher Metal index. Telecom and Realty indices were the top losers, down 0.8% and 0.4% respectively.

FIIs net sold stocks and index futures worth Rs 1086 cr and 391 cr respectively but net bought stock futures worth Rs 382 cr. DIIs were net buyers to the tune of Rs 541 cr.

Rupee, after hitting a record low of 72.90/$, reversed to end at 72.1850/$, appreciating 50 paise compared to previous close. The recovery happened on news reports that PM Modi will be holding a meeting to discuss economic scenario as well as the rupee during the weekend.

CPI in the month of August eased to an 11-month low of 3.69% as compared to 4.17% in July owing to fall in food inflation.

Industrial production grew at 6.6% in July as compared to downwardly revised 6.8% from the provisional estimate of 7

OUTLOOK

Today morning, Nikkei and Hang Seng are up 0.7% and 0.2% respectively but Shanghai is down 0.3%. SGX Nifty is trading around 11485, suggesting about 70 points higher start when compared to Wednesday's close of Nifty futures.

In Wednesday's report we had said that "Having breached 11300 support, 11171-11160 is the next support zone to eye where 11171 is the top made in January and 11160 is the 50% retracement level of the 10557-11760 upmove".

Nifty, after touching a low of 11250, rebounded sharply to end at 11370 and is set to open above 11400 today.

34-DMA, placed around 11460, continues to be immediate hurdle to eye, a crossover of which is required for further upmove. 11603, the top made last Friday, would be the next upside target if that happens.

11250, the bottom made on Wednesday, is now the immediate support to eye.