FED STAYS PUT; NIFTY ON TRACK TO ACHIEVE 7965 TARGET

FED STAYS PUT; NIFTY ON TRACK TO ACHIEVE 7965 TARGET

WORLD MARKETS                             

Dow and S & P 500 ended lower by nearly a third of a percent and Nasdaq gained 0.1% after digesting the Federal Reserve's rate decision and Fed Chair Janet Yellen's press conference.

Fed kept interest rates unchanged, citing concerns about global economic growth. Fed Chair Yellen reiterated at the subsequent press conference that the path of a rate hike is more important than the timing of the first one.

Treasury yields extended losses, with the 10-year yield at 2.19%. The 2-year yield fell to 0.68%, wiping out its gains for the week. Dollar index fell about 1%.

Crude settled down 25 cents at $46.90 a barrel after surging 5.7% Wednesday.

European markets, except a 0.7% lower FTSE, ended with modest gains.

Earlier, the Shanghai Composite closed down 2.08% amid volatility, while Japan's Nikkei finished 1.43% higher.

AT HOME

After a positive start, benchmark indices added some more gains through the session to end higher by nearly a percent. Sensex settled at 25964, up 258 points while Nifty rose 70 points to finish at 7899. BSE mid-cap and small-cap indices however lost 0.2% and 0.4% respectively. BSE Bankex soared 1.4%, becoming top gainer among the sectoral indices, followed by 0.7% rise in Power index. Consumer Durable and Oil & Gas indices were the top losers, down 1.4% and 0.6% respectively.

FIIs net sold stocks and index futures worth Rs 337 cr and 50 cr respectively but net bought stock futures worth Rs 1038 cr. DIIs were net buyers to the tune of Rs 424 cr.

Rupee depreciated 9 paise to end at 66.455/$.

The Reserve Bank of India (RBI) yesterday granted an in-principle nod to 10 applicants for small finance banks. Small bank should have 75% of its adjusted net bank credit to be extended to priority sector and it should have at least 25 branches in unbanked rural areas.

OUTLOOK

Today morning Nikkei is down more than a percent while other Asian markets are trading mixed with modest changes. SGX is trading at 7960, suggesting a 60 point higher opening for our market compared to Wednesday's close of Nifty future.

Ever since Nifty crossed 7850 hurdle, we have been working with an upside target of 7965, which is the 61.8% retracement level of the entire 8655-7540 fall seen since July end. Above 7965, 8092, the top made on 28th August, would be the next upside target to eye.

After today's gap up opening, immediate support on the hourly chart would have moved up to 7820, which should serve as the stop loss for trading longs. Some profit booking is advised around 7965.