EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

EBOLA, GROWTH WORRIES SPARK RISK-OFF TRADE; 7785-7972 CONTINUES TO BE RANGE FOR NIFTY

WORLD MARKETS

US indices, after plunging nearly 3% intraday amid worries over global growth and the spread of Ebola, recovered quite a bit in the late noon trade to end with cuts ranging from 0.3%-1.1%.

Reports of diagnosis of another Ebola case in the US weighed on the sentiment. Also, U.S. retail sales fell 0.3% in September, slightly more than the expected 0.2% decline. Business inventories rose less than expected in August. The producer price index for September fell 0.1% as opposed to expectations of a 0.1% gain.

Fed released its "Beige Book" that said the economy is growing at a "modest to moderate" pace.

Bank of America posted a smaller-than-expected loss, while BlackRock reported better-than-expected earnings.

The U.S. 10-year Treasury note yield dipped below 2 percent for the first time since May 2013. Nymex crude settled down 6 cents to $81.8 a barrel; Gold rose $10.5 to $1242 an ounce.

European markets nosedived between 2%-4%. Greece plunged 6% on political uncertainty. Greek Prime Minister won a confidence vote last week, which called for lawmakers to back plans to exit an international bailout program early.

Greek bond yields crossed 7% threshold while 10-year German yields fell to another record on safe haven buying.

                                                             

AT HOME

On Tuesday, benchmark indices ended with modest cuts after a choppy trading session. Sensex lost 35 points to settle at 26349 while Nifty finished at 7864, down 20 points. BSE mid-cap and small-cap indices lost 0.2% and 0.1% respectively. BSE Realty index nosedived 9.2%, becoming top loser among the sectoral indices, followed by 0.8% cut in IT index. Power index and Bankex gained 0.5% each.

FIIs net sold stocks and index futures worth Rs 695 cr and 303 cr respectively but net bought stock futures worth Rs 93 cr. DIIs were net buyers to the tune of Rs 496 cr.

Rupee fell 31 paise to close at 61.41/$.

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

WPI inflation for September cooled off to a 5-year low at 2.38% vs 3.74% in August on lower food and fuel price.

India's trade deficit in September widened to a 16-month high of $14.25 bn as imports surged 26% y-o-y to $43.2 bn while exports grew a tepid 2.7% to $28.9 bn.

OUTLOOK

Today morning, Nikkei is down more than 2% on strengthening yen. Other Asian markets are trading with average cuts of a percent. SGX Nifty is trading at 7880, which is 15 point lower than Tuesday's closing of Nifty future.

In the assembly election held yesterday, Haryana recorded all-time high 73% turnout while Maharashtra saw 64% turnout. Most of the exit polls predicted that BJP will form government in both the states.

While Nifty has been repeatedly bouncing back from the crucial 7785 support, we have been indicating that the resumption of higher-top higher-bottom formation is required to turn the near term view bullish. Therefore, in Tuesday's report we had termed 7785-7972 a no-trading zone where 7972 is the immediate previous top on the daily chart.

That continues to be the view. Traders are advised to wait for the crossover of 7785-7972 range on either side for taking a fresh view on Nifty. A breach of 7785 can take Nifty all the way to 7540 while a crossover of 7972 can take it in the vicinity of 8180.

TCS and Hero Moto Corp will report their quarterly earnings today.