NIFTY TAKES OUT 8055-8100 HURDLE; STAY LONG WITH THE STOP LOSS OF 8000 FOR TARGETS OF 8220, 8400

NIFTY TAKES OUT 8055-8100 HURDLE; STAY LONG WITH THE STOP LOSS OF 8000 FOR TARGETS OF 8220, 8400

WORLD MARKETS                             

Dow and S & P 500 climbed 1.8% each and Nasdaq rose 1.6% yesterday, extending Friday's surprise intraday reversal, which came after poor jobs report that in turn fueled expectations that the Fed will refrain from tightening monetary policy this year.

News that the U.S., Japan and 10 other Pacific Rim countries reached an agreement on the five-years-in-the-making Trans Pacific Partnership (TPP) also boosted sentiment. The trade deal, called one of the biggest of its kind in a generation, could yield global annual benefits of $295 billion by 2025. The deal still needs final approval from U.S. Congress.

US ISM non-manufacturing came in at 56.9 for September, below Augusts’ 59 read and expectations of 57.5. The final Markit PMI services index for September came in at 55.1, below August's 56.1 and the lowest read since June.

Nymex oil rose 72 cents to settle at $46.26 a barrel.

European markets surged 2.8%-3.8%. The basic resources sector was the top performer.  Glencore surged 16% on the London Stock Exchange on reports that the embattled mining giant was in talks with a few parties, including Saudi Arabia's sovereign wealth fund, to sell a stake in its agricultural business. Eurozone’s final composite purchasing managers' index (PMI) for September came in at 53.6, below Augusts’ figure of 54.3 and hitting its lowest level since May 2015. Euro zone August retail sales were flat month-on-month, but rose 2.3% y-o-y.

AT HOME

Sensex and Nifty soared 2.2% each, registering the largest single day gain after 15th January and closing at the highest level since 21st August. Sensex settled at 26786, up 565 points while Nifty climbed 168 points to finish at 8119. BSE mid-cap and small-cap indices gained 1.8% and 1.6% respectively. All the BSE sectoral indices ended higher with Capital Goods index and Bankex leading the tally, surging 3.3% and 2.8% respectively.

FIIs net bought stocks, index futures and stock futures worth Rs 650 cr, 1627 cr and 671 cr respectively. DIIs were net buyers to the tune of Rs 366 cr.

Rupee appreciated 23 paise to end at seven-week high of 65.28/$.

Germany and India yesterday inked 18 MoUs to scale up ties in strategic areas including defence, security, intelligence, railways, trade and investment and clean energy.

OUTLOOK

Today morning Asian markets are trading with gains of 0.5%-1.5% and SGX Nifty is suggesting about 70 points higher opening for our market.

In yesterday's report we had mentioned that "8050-8100 continues to be important resistance area, a crossover of which will also confirm a higher-top higher-bottom formation on the daily chart along with a breakout from a "cup and handle" formation, the target of which comes to around 8400 which also coincides with 200-DMA". We had also advised holding on to trading longs with the stop loss of 7855.

The benchmark soared 168 points to end at 8119, crossing the 8050-8100 resistance decisively.

While 8400 continues to be major upside target to eye, 8220, where the 20-week moving average as well as a gap on the daily chart is placed, is the immediate target to eye.

Immediate support on the hourly chart is placed around 8000, with the stop loss of which trading longs should be held on to.