CONSOLIDATION CONTINUES

CONSOLIDATION CONTINUES

WORLD MARKETS                             

After a negative start, US indices rebounded more than half a percent from the bottom of the day to end with modest gains yesterday, digesting the minutes of July Fed meeting.

The minutes showed FOMC members had a generally upbeat view on the U.S. economy and labor market, but most agreed more data were needed before increasing rates again.

Dollar index, after touching a low of 94.51, recovered to settle at 94.72, the previous close being 94.78. Gold fell $8 to $1349 an ounce.

US oil rose 0.5% to $46.79 a barrel after data from Energy Information Administration showed oil inventories decreased by 2.5 mn barrels last week.

European markets fell 0.5%-1.6%

AT HOME

Benchmark indices ended lower by a fifth of a percent, extending the losing streak to second consecutive day. Sensex lost 59 points to settle at 28005 while Nifty finished at 8624, down 18 points. BSE mid-cap and small-cap indices however gained 0.7% and 0.6% respectively. BSE IT and Teck indices tumbled 1.7% and 1.4% respectively, becoming top losers among the sectoral indices while Metal and Basic Material indices were the top gainers, putting on 2% and 1% respectively.

Gross FII buying and selling was exactly the same at Rs 4033 cr, resulting in the net figure of zero. DIIs were net sellers to the tune of Rs 89 cr. FIIs net sold index futures worth Rs 125 cr but net bought stock futures worth Rs 266 cr.

Currency market was shut yesterday for Parsi New Year.

OUTLOOK

Today morning, Nikkei, pressured by a stronger Yen which is trading below 100 against the dollar, is down about half a percent. Other Asian markets however are trading with gains of upto a percent with Hang Seng on the top. SGX Nifty is suggesting about 15 points higher start for our market.

Yesterday was no different in the overall scheme of things as Nifty extended more than two week old consolidation by falling 18 points to end at 8624.

As mentioned yesterday, 8540, which is the immediate previous bottom on the daily chart, also coincides with the 34-DMA, and therefore is the important immediate support to eye. On the way up, 8700-8730 is the supply area, a decisive crossover of which is required for the fresh upmove. Till that happens, trade light" "would continue to be the advise.”