NIFTY BREAKS THREE-DAY LOSING STREAK

NIFTY BREAKS THREE-DAY LOSING STREAK

WORLD MARKETS                             

After rising more than a percent in the initial trade,  US indices gave away most of the gains through rest of the session with Dow and S & P 500 closing just 0.1% higher while Nasdaq ended 0.4% lower, eyeing fluctuations in oil prices and awaiting the final jobs report before the Federal Reserve's key September meeting.

The August ISM non-manufacturing index came in at 59.0, above expectations and a touch below the nearly 10-year high of July's 60.3 read. Weekly jobless claims rose to 282,000. The overall U.S. July trade gap narrowed to $41.86 billion, the smallest in five months, while the U.S.-China trade deficit in July increased slightly to $31.58 billion from $31.46 billion in June.

Nymex oil settled 50 cents or 1.1% higher at $46.75 a barrel after a choppy trade. Dollar index spiked to its highest since Aug. 19, with the euro weaker near $1.11 after hitting a low of $1.1086. Gold lost $9 to $1124 an ounce.

European markets gained 1%-2.7% after the European Central Bank hinted that its asset-purchase program would be increased if needed.. European Central Bank decided to keep interest rates unchanged and downgraded its inflation forecast. Eurozone final August Composite PMI came in at 54.3, above an earlier estimate of 54.1 and marking a four-year high.

AT HOME

There was some respite for bulls as Sensex and Nifty climbed 1.2% and 1.4% respectively in yesterday's trade, breaking the three-day losing streak. Sensex gained 311 points to settle at 25765 while Nifty finished at 7823, up 106 points. BSE mid-cap and small-cap indices gained 1.2% each. All the BSE sectoral indices ended in green with Realty and Metal indices leading the tally, up 4.6% and 2.4% respectively.

FIIs net sold stocks worth Rs 394 cr but net bought index futures and stock futures worth Rs 459 cr and 321 cr respectively. DIIs were net buyers to the tune of Rs 840 cr.

Rupee depreciated 5 paise to end at 66.24/$.

India's Nikkei/Markit Services Purchasing Managers' Index rose to 51.8 in August from July's 50.8, marking a second month above the 50-level that separates growth from contraction.

Samajwadi Party yesterday decided to pull out of the JD(U)-RJD-Congress alliance in Bihar.

Indian Met Department yesterday said that while monsoon is expected to be 23% deficient in September, the overall average rainfall will be 88% long period average (LPA), plus or minus 4%.

OUTLOOK

China's stock market remains closed today for a second day as the country commemorates the end of World War Two.

Hang Seng is up about half a percent while other Asian markets are trading with cuts in the vicinity of half a percent. SGX Nifty is suggesting about 20 points lower opening for our market.

After going closer to 7667 bottom made on 25th August by touching a low of 7699 on Wednesday, Nifty rebounded yesterday to close at 7823.

7677 continues to be important support level to eye, a breach of which can lead to another round of panic selling. Immediate hurdle on the hourly chart is placed at 7915, upon crossover of which 8092, the top made last Friday, would be the next target to eye.

Key data to watch today would be US nonfarm payroll data for August which is expected to show an addition of 220000 jobs. More important number however would be the wage growth, which is expected to rise by a modest 0.2%.