FIRST QUARTER GDP HITS 9-QUARTER HIGH; SC VERDICT ON COAL BLOCKS IN FOCUS
WORLD MARKETS
US indices gained between 0.1%-0.5% on Friday, rebouding from Thursday’s losses and lifting the S&P 500 to another record finish, as investors welcomed a better-than-expected read on U.S. consumer confidence and bypassed geopolitical worries.
The Thomson Reuters/University of Michigan's final take on consumer sentiment rose to 82.5 in August from 81.8 the month before. Earlier data showed consumer spending unexpectedly declined in July, off 0.1% after rising 0.4% the month before.
Geopolitical worries persisted. U.K. Home Secretary said the government was hiking the terror threat level to severe, based on intelligence from Iraq and Syria.
In Ukraine, fighting between separatists and government forces reportedly intensifying and NATO released satellite images of Russian troop movements in eastern Ukraine, a claim dismissed by Russia. The European Union and United States have warned of additional sanctions against Russia, even as the EU started discussions in Moscow on Friday targeting an interim agreement with Ukraine to restart natural-gas flows.
European markets ended with gains of upto half a percent. Euro-zone inflation for August came in at 0.3%, marking a five-year low this month. unemployment numbers for the bloc remained stable at 11.5 percent, meeting market expectations.
Nymex crude rose $1.4 to $96 a barrel. Gold lost 0.3% to $1287 an ounce.
For the week, US indices gained between 0.6%-0.9% and European equities climbed 0.7%-3%.
AT HOME
Benchmark indices ended higher by about a fourth of a percent after trading in a narrow range on the expiry day of the August derivative series, marking a fresh all-time high on closing basis. Sensex gained 78 points to settle at 26638 while Nifty gained 18 points to finish at 7954. BSE mid-cap index lost 0.3% while the small-cap index rose 0.1%. BSE Capital Goods and Oil & Gas indices gained 1.4% and 1.1% respectively, becoming top gainers among the sectoral indices while Realty and Metal indices lost 1.9% and 0.9% respectively.
FIIs net sold stocks and stock futures worth Rs 711 cr and 328 cr respectively but net bought index futures worth Rs 847 cr. DIIs were net buyers to the tune of Rs 730 cr.
Rupee depreciated 4 paise to close at 60.495/$.
For the week, Sensex and Nifty gained 0.8% and 0.5% respectively.
Data released on Friday showed that India’s first quarter GDP grew at a nine-quarter high of 5.7%, compared with 4.6% in the previous quarter.
OUTLOOK
China's official PMI for August has came in at 51.1, below market expectations for 51.2 and July's reading of 51.7. The final HSBC manufacturing PMI has come in at 50.2, down from a flash estimate of 50.3.
Asian markets are trading with modest gains and SGX Nifty is trading around 8027, suggesting about 40 points higher opening compared to Thursday’s close.
As you would remember, we have been bullish on Nifty ever since 7690 hurdle was taken out on 12th august and have been advising holding on to trading longs with a trailing stop loss. That continues to be the view. 7862, last week's low, is the immediate support, with the stop loss of which trading longs should be held on to.
The upward sloping trendline adjoining tops made in June and July presents a resistance around 8020, which would be the immediate target on the way up.
Key event to watch out today would be the Supreme Court verdict on the coal bloc allocation which it deemed illegal last week.
India's HSBC manufacturing PMI for August is due today. The reading for July had come in at 53, up from 51.5 in June. Auto companies will report their August sales figures.
US markets will remain shut on today for the Labor Day holiday.
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