CPI COOLS TO ALL-TIME LOW; NIFTY REBOUNDS FROM THE VICINITY OF 7785 SUPPORT

CPI COOLS TO ALL-TIME LOW; NIFTY REBOUNDS FROM THE VICINITY OF 7785 SUPPORT

WORLD MARKETS

US indices plunged about a percent and half yesterday, extending the fall to third straight session as concerns over slowing global economy persisted. S & P 500 closed below its 200 DMA for the first time after 19th November 2012.

European markets, except a modestly lower Italy, ended with modest gains. Basic resource sector gained 2.8% following strong Chinese data which showed exports surged 15.3% y-o-y in September.

Nymex crude fell 8 cents to $85.7 a barrel; Gold rose $8.3 to $1230 an ounce.

                                                             

AT HOME

After a gap down opening, benchmark indices saw a sustained upward move through the session to erase all the losses and in fact end higher by a third of a percent. Sensex gained 86 points to settle at 26384 while Nifty finished at 7884, up 24 points. BSE mid-cap and small-cap indices gained 0.5% and 0.3% respectively. BSE Metal index and Bankex gained the most among the sectoral indices, rising 1.4% each. Realty and Healthcare indices lost 1.8% and 1% respectively, becoming top losers.

FIIs net sold stocks, index futures and stock futures worth Rs 671 cr, 822 cr and 21 cr respectively. DIIs were net buyers to the tune of Rs 567 cr.

Rupee appreciated 26 paise to close at 61.09/$.

The Consumer Price Inflation for the month of September cooled off to 6.46%, the lowest since India started computing CPI in January 2012, led by lower food prices and fuel costs.

Reliance Industries reported a consolidated net profit of Rs 5972 cr for the quarter ended September, which was up 0.3% q-o-q and 1.7% y-o-y. Consolidated sales declined 4.3% y-o-y to Rs 1.13 lakh cr. Gross refining margins came in higher than estimates at USD 8.3 a barrel vs 8.7 in first quarter and forecast of 7.7-8.

SEBI yesterday barred DLF Ltd from accessing the capital market for three years for non-disclosure of its 2007 IPO documents.

OUTLOOK

Today morning Asian markets are trading mixed and SGX Nifty is suggesting about 20 points higher opening for our market.

Ever since Nifty broke the higher-top higher-bottom formation on the daily chart by closing below 7925 on 25th September, we have been working with a downside target of 7785, which is the 61.8% retracement level of the 7540-8180 upmove.

Nifty, after touching a low of 7796 yesterday, rebounded to close at 7884, validating this support once again.

7785 continues to be crucial support, a breach of which would open up the possibility of the retest of the 7540 bottom.

7972, the top made last week, which is also the immediate previous top on the daily chart, continues to be important resistance to eye.

This makes 7785-7972 a no-trading zone, a breach of which, on either side is required to take a fresh view on Nifty.

Bajaj Auto will report its quarterly earnings today.

WPI inflation for September would come out today and is expected to ease to 3.1% from 3.74% in August.