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.

ALL EYES ON BOJ, FED; 8690-8860 CONTINUES TO BE RANGE AT HOME

ALL EYES ON BOJ, FED; 8690-8860 CONTINUES TO BE RANGE AT HOME

WORLD MARKETS                             

US indices, after gaining about half a percent in the initial trade, gave away most of the gains through the session to end just marginally higher, awaiting the latest monetary policy decisions from the Federal Reserve and the Bank of Japan.

U.S. housing starts came in at an annualized rate of 1.14 million in August, well below the expected 1.19 million. Construction permits fell 0.4% to a 1.14 million-unit rate last month.

US oil ended 0.32% higher at $43.44 per barrel.

Dollar index rose to 96 from 95.84. U.S. Treasuries traded mixed, with the two-year note yield traded at 0.77% and the benchmark 10-year note yield around 1.69%.

AT HOME

Benchmark indices ended lower four tenth of a percent yesterday, breaking the four-day winning streak. Sensex lost 111 points to settle at 28523 while Nifty finished at 8776, down 32 points. BSE mid-cap and small-cap indices fell 0.1% and 0.3% respectively. Except a 0.3% and 0.2% rise in Metal and Oil & Gas indices respectively, all the BSE sectoral indices ended in red with Realty and Power indices leading the tally, down 1.9% and 0.8% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 1147 cr, 89 cr and 896 cr respectively. DIIs were net buyers to the tune of Rs 778 cr.

Rupee depreciated 5 paise to end at 67.01/$.

OUTLOOK

All eyes today would be on the Bank of Japan and US Federal Reserve, which are scheduled to issue policy statements today, at the end of their two-day policy review meetings.

There is some talk the Japanese central bank could cut rates further into negative territory, but it could also cut back on purchases of long-dated bonds while continuing to buy short-dated securities in  a bid to steepen the yield curve to mitigate the costs of negative rates. Market would also be interested in the outcome of an internal staff review of Japan's growth and inflation under the bank's quantitative and qualitative easing (QQE) and negative interest rate policies (NIRP).

Fed on the other hand is widely expected not to not to raise interest rate until December owing to global economic weakness, inconsistent U.S. data, upcoming US Presidential election and the failure of the market to price in a hike. Markets however would watch out for the tone of the policy statement and inflation forecast to guage the dovishness/hawkishness of the Fed and its assessment of the US economy.

Today morning, Asian markets are trading mixed with modest changes and SGX Nifty is suggesting about 10 points lower start for our market.

At the risk of repeating, 8690, the bottom made last week, which coincided with 34-DMA, continues to be important immediate support to eye, a breach of which will also confirm a lower-top lower-bottom formation on the daily chart. 8540, the bottom made towards the end of August, would be the next support in that case. On the way up, 8860, the upper level of the gap created by the big gap-down opening last Monday, continues to be the immediate hurdle, a crossover of which is required for the fresh upmove.

8860-8690 CONTINUES TO BE THE IMMEDIATE RANGE

8860-8690 CONTINUES TO BE THE IMMEDIATE RANGE

WORLD MARKETS                             

After rising more than half a percent in the intial trade, Dow and S & P 500 gave away all the gains through the session to end flat while Nasdaq lost 0.2%.

US oil settled 0.6% higher at $43.30 per barrel, after gaining more than 2%, as Venezuela President said that OPEC and non-OPEC countries were close to reaching an output stabilizing deal. Brent rose 0.4%.

Dollar index fell to 95.87 from 96.04. US treasuries fell, with the two-year note yield near 0.77% and the benchmark 10-year yield around 1.7%. Gold rose $8 to $1318 an ounce.

European markets climbed 1%-1.5%

AT HOME

Sensex and Nifty gained 0.1% and 0.3% respectively, extending the winning streak to fourth straight day. Sensex settled at 28634, up 35 points while Nifty added 29 points to finish at 8808. BSE mid-cap and small-cap indices gained 0.6% and 0.5% respectively. Except a 0.4% lower FMCG index, all the BSE sectoral indices ended in green with Realty and Metal indices leading the tally, up 1.6% and 1.3% respectively.

FIIs net bought stocks and stock futures worth Rs 205 cr and 101 cr respectively but net sold index futures worth Rs 431 cr. DIIs were net sellers to the tune of Rs 252 cr.

Rupee appreciated 2 paise to end at 66.96/$.

OUTLOOK

Today morning, except a 0.3% higher Nikkei, other Asian markets are trading with modest cuts and SGX Nifty is suggesting about 15 points lower start for our market.

In yesterday's report we had mentioned that 8860, the upper level of the gap created by the big gap down opening last Monday, continues to be the immediate hurdle to eye, upon sustained trading above which, 8970 would the next important resistance. We had also said that 8690, the bottom made last week, is the important support to eye, a close below which, will also confirm a lower-top lower-bottom formation on the daily chart and would pave the way for the retest of the 8540 bottom, from where the rally had begun in the fag end of August.

That continues to be the view. Traders should wait for the breach of 8860 on the upside or 8690 on the downside for taking a fresh view on Nifty.

Central banks in Japan and the U.S. begin closely watched two-day policy meetings today. US Federal Reserve is widely expected to stay put, following a deluge of disappointing U.S. data. The BOJ, meanwhile, is expected to take some action, as speculation points to a possible rate cut deeper into negative territory.

NIFTY RESISTED NEAR 8860 HURDLE; 8690 CONTINUES TO BE IMPORTANT SUPPORT

NIFTY RESISTED NEAR 8860 HURDLE; 8690 CONTINUES TO BE IMPORTANT SUPPORT

WORLD MARKETS                             

US indices fell 0.1%-0.5% on Friday, digesting key inflation data and lower oil and looking ahead to Federal Reserve meeting to be held this week.

US Consumer Price Index rose at a more than expected 0.2% rate last month after being unchanged in July. In the 12 months through August, the CPI increased 1.1% after advancing 0.8% in July. September consumer sentiment came in below the expected 90.8.

Market expectations for a rate hike next week rose slightly after the inflation data, but remained relatively low. U.S. Treasuries traded lower, with the two-year note yield at 0.77% and the benchmark 10-year note around 1.69%. The U.S. dollar index surged to 96.04 from 95.28.

US oil fell 2% to $43.03 per barrel .

European markets fell 0.3%-2.4% with banks leading the declines after the U.S. Department of Justice asked the German lender, Deutsche Bank, to pay $14 billion to settle allegations of mis-selling mortgage securities.

For the week, Dow eked out 0.2% gain, S & P 500 rose 0.5% while Nasdaq soared 2.3%. Europe ended deep in the red, with key markets falling 1%-3.5%. Asian markets too fell with Nikkei and Shanghai down 2.6% and 2.5% respectively while Hang Seng fell 3.2%.

AT HOME

After soaring a percent and fifth in the morning trade, Sensex and Nifty gave away about two third of these gains in sharp noon plunge to end higher by 0.66% and 0.43% respectively. Sensex settled at 28599, up 186 points while Nifty added 37 points to finish at 8780. BSE mid-cap index once again ended in red, losing 0.3%, while small-cap index rose 0.15%. BSE FMCG and IT indices climbed 1.2% each, becoming top gainers among sectoral indices while Metal index tumbled 1.3%, becoming top loser, followed by 0.5% lower Basic Material index.

FIIs net bought stock and index futures worth Rs 661 cr and 427 cr respectively but net sold stock futures worth Rs 522 cr. DIIs were net sellers to the tune of Rs 213 cr.

Rupee appreciated 4 paise to end at 66.98/$.

For the week, Sensex and Nifty lost 0.7% and 1% respectively.

OUTLOOK

Today morning, Japanese market is closed for a public holiday, other Asian markets are trading with gains of upto half a percent and SGX Nifty is suggesting a marginally higher start for our market.

After consolidating around and testing the 34-DMA support, Nifty on Friday surged to 8848, but slipped sharply from there to end at 8780. Readers would recall that for past couple of sessions we had been mentioning that 8860 is where the upper level of the gap created by the big gap down opening on Monday, would be the immediate hurdle to eye and the top made Friday was very close to it.

8860 continues to be the immediate hurdle to eye, upon sustained trading above which, 8970 would the next important resistance. 8690, the bottom made last week, is the important support to eye, a close below which, will also confirm a lower-top lower-bottom formation on the daily chart and would pave the way for the retest of the 8540 bottom, from where the rally had begun in the fag end of August.

NIFTY SET TO SURGE AFTER HOLDING 34-DMA SUPPORT; 8860 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY SET TO SURGE AFTER HOLDING 34-DMA SUPPORT; 8860 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS                             

Dow and S & P 500 climbed 1% each and Nasdaq surged 1.5% yesterday, supported by gains in Apple and rebound in oil and as weak retail sales data was seen as boosting the chances of the Federal Reserve keeping interest rates on hold this month.

Retail sales for August missed expectations, falling more than expected. Initial jobless claims came in at 260,000, slightly below expectations, while August PPI came in unchanged, missing expectations. Industrial production fell 0.4% in August, more than the expected 0.3% slide.

Apple soared 3.4%, taking weekly gains to 12%, on strong iPhone 7 sales.

US oil rose 0.8% to $43.91 per barrel.

Dollar index .Gold fell $8 to $1318 per ounce.

European markets gained 0.1%-0.8%. The Bank of England kept interest rates and its bond-buying program unchanged. The central bank raised its third-quarter growth forecast to 0.3% quarter-on-quarter from a previous estimate of 0.1%. It also said inflation would reach the 2% target in the first half of 2017. U.K. retail sales rose 6.2% year-on-year last month, beating market expectations.

AT HOME

It was yet another day of consolidation with positive bias as benchmark indices ended with modest gains after a range bound but choppy trade. Sensex added 41 points to settle at 28413 while Nifty finished at 8743, up 16 points. BSE mid-cap index however fell 0.2% while small-cap index rose 0.3%. BSE FMCG and Healthcare indices rose 0.7% and 0.5% respectively, becoming top gainers among the sectoral indices while Utilities and Consumer Durable indices were the top losers, down 1.2% and 1% respectively.

FIIs net bought stocks worth Rs 345 cr but net sold index futures and stock futures worth Rs 592 cr and 518 cr respectively. DIIs were net sellers to the tune of Rs 456 cr.

Rupee depreciated 13 paise to end at 67.02/$.

India's trade deficit in August narrowed 38% y-o-y to $7.674 bn while figure for July was $7.76 bn. Exports fell 0.3% y-o-y to $21.5 bn while imports were down 14.1% y-o-y at $29.2 bn.

Oil marketing companies hiked petro price by 58 paise/litre but cut diesel price by 31 paise.

OUTLOOK

Markets in China, Taiwan and Korea continue to remain shut for the second day. Other Asian markets are trading with gains in the vicinity of half a percent and SGX Nifty is suggesting about 40 points higher start for our market.

Readers would recall that we have been repeatedly telling that the region in the vicinity of 8700 is the crucial support area as the 61.8% retracement level of the 8544-8969 upmove and 34 DMA are placed at 8706 and 8685 respectively.

Nifty has consolidated around these levels for past three sessions and is set to open higher today, giving more credence to it.

8689, the bottom made this week, is the important immediate support to eye. On the way up, 8860 continues to be the immediate hurdle to eye.

NIFTY REBOUNDS FROM 34-DMA SUPPORT; 8860 IS THE IMMEDIATE HURDLE

NIFTY REBOUNDS FROM 34-DMA SUPPORT; 8860 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

After a positive start, Dow and S & P 500 saw a gradual downward move through the session to end lower by 0.1% and 0.2% respectively. Nasdaq however, supported by gains in Apple, rose 0.4%.

Oil initially rose on EIA data which showed US oil inventories fell by about 6 lac barrels last week, but could not hold those gains and reversed to end 2.9% lower at $43.58 per barrel.

US August import prices fell 0.2%. In the 12 months through August, import prices fell 2.2%, the smallest decrease since October 2014, after declining 3.7% in July.

Dollar index fell to 95.34 from 95.58. U.S. Treasuries rose after a large sell-off on Tuesday, with the two-year note yield near 0.75% and the 10-year note yield around 1.69%.

European markets, except a 0.1% higher FTSE, ended flat to modestly lower.

AT HOME

Benchmark indices ended marginally higher after a range bound but choppy trading session, breaking two-day losing streak. Sensex settled at 28372, up 19 points while Nifty added 11 points to finish at 8727. BSE mid-cap and small-cap indices however soared 1.3% and 1.2% respectively. BSE Basic Materials and Consumer Durable indices climbed 2% and 1.1% respectively, becoming top gainers among the sectoral indices while IT and Teck indices lost 0.7% and 0.4% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 477 cr, 551 cr and 769 cr respectively. DIIs were net sellers to the tune of Rs 9 cr.

Rupee appreciated 3 paise to end at 66.89/$.

OUTLOOK

Today, markets of China, Taiwan and Korea are shut. Hang Seng is modestly higher, but Nikkei is down more than a percent and SGX Nifty is suggesting about 25 points lower start for our market.

In yesterday's report we had mentioned that 8700, the Monday's low, also roughly coincides with the 61.8% retracement level of the 8544-8969 upmove as well as the 34-DMA placed at 8706 and 8685 respectively, and therefore is an important support to eye.

The benchmark, after touching a low of 8689, rebounded to close at 8727, holding on to the support levels mentioned above.

A sustained trading below 8685 would open up the possibility of the retest of the 8544 bottom.

On the way up, 8860, the upper level of the gap created by the big gap-down opening on Monday, continues to be the immediate hurdle to eye, above which, 8969, would be the next hurdle to eye.

NIFTY TESTS CRUCIAL 8700 SUPPORT; 8860 IS THE IMMEDIATE HURDLE

NIFTY TESTS CRUCIAL 8700 SUPPORT; 8860 IS THE IMMEDIATE HURDLE

WORLD MARKETS                             

US indices plunged 1.1%-1.5% yesterday, giving away all the gains made in the previous session, amid a spike in volatility and lower oil prices.

Energy stocks fell the most as US crude fell 3% to $44.90 and Brent slipped 2.5% to $47.10 after International Energy Agency (IEA) said that it may take longer for oil prices to re-balance, citing a faster-than-expected slowdown in global oil demand growth.

The CBOE Volatility Index (VIX) rose about 23% to 18.61.

U.S. Treasuries slipped, with the two-year note yield near 0.79% and the 10-year note yield around 1.71%.

Dollar index rose to 95.58 from 95.15. Gold fell $2 to $1324 per ounce.

US indices had soared 1.3%-1.7% on Monday after Lael Brainard, a Fed governor, said it would be wise to keep rates low despite continuous economic progress and Dennis Lockhart, Atlanta Fed president, said in a separate speech that a "serious discussion" on raising rates is warranted at the central bank's upcoming meeting.

European markets fell 0.4%-1.7% yesterday.

AT HOME

After a big gap down opening benchmark indices shed some more weight through rest of the session to finally end with deep cuts of more than a percent and half, registering the biggest daily fall since 24th June 2016. Sensex slumped 444 points to settle at 28354 while Nifty finished at 8716, down 151 points. BSE mid-cap and small-cap indices tumbled 3% and 2.4% respectively. Except a 0.9% and 0.3% higher IT and Teck indices respectively, all the BSE sectoral indices ended in red with Realty and Metal indices leading the tally, down 5.2% and 4.3% respectively.

FIIs net sold stocks, index futures and stock futures worth Rs 594 cr, 598 cr and 922 cr respectively. DIIs were net sellers to the tune of Rs 13 cr.

Rupee depreciated 24 paise to end at 66.92/$.

August CPI fell sharply to 5.05% y-o-y from 6.07% in July, thanks to a sharp fall in food inflation, which slowed to 5.91% from 8.35%. Separately, July index of industrial production came in at negative 2.4%, compared to 1.95% (revised) in June and an expectation of 1.37%, driven mainly by weakness in capital goods.

Tata Steel reported a consolidated loss of Rs 3183 cr for June quarter compared with Rs 317 cr in same period last fiscal, dented by discontinued operations. However, pre-exceptional underlying profit before tax stood at Rs 1080 cr against loss of Rs 234 cr in preceding quarter. Revenue fell 5.8% to Rs 26406 cr. Operational performance was very strong, with consolidated EBIDTA rising 21.4% to Rs 3270 cr due to improved operating performance across India, Europe and South East Asia. EBIDTA margin expanded 520 bps q-o-q and 280 bps y-o-y to 12.4%. Standalone profit shot up 35.3% to Rs 575 cr and revenue grew by 1.5% to Rs 10324 cr.

OUTLOOK

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

After Nifty breached immediate support of 8870 on Friday, on Monday, we had said that the benchmark was likely to test 8730-8690 zone where 8730 was the upper level of the erstwhile 8540-8730 consolidation phase while 20 DMA and 34-DMA were placed around 8720 and 8690 respectively.

The benchmark plunged to 8699 on Monday before closing at 8716, testing the support area mentioned above.

8700, the Monday's low, also roughly coincides with the 61.8% retracement level of the 8544-8969 upmove as well as the 34-DMA, and therefore is an important support to eye. A sustained trading below 8700 would open up the possibility of the retest of the 8544 bottom.

8860, the upper level of the gap created by the big gap-down opening on Monday, is the immediate hurdle to eye above which 8969, would be the next hurdle to eye.