NIFTY SLIPS AFTER FAILING TO CROSS THURSDAY’S TOP; 8790 CONTINUES TO BE IMMEDIATE SUPPORT

NIFTY SLIPS AFTER FAILING TO CROSS THURSDAY’S TOP; 8790 CONTINUES TO BE IMMEDIATE SUPPORT

WORLD MARKETS                             

US indices fell 0.6%-0.7% on Friday to snap a three-day winning streak, with energy stocks leading the losses on the back of sharp fall in oil prices.

US oil tumbled 4% to settle at $44.48 per barrel on reports that Saudi Arabia doesn't see an output deal being reached at Monday's meeting in Algeria.

The September read on the Markit Manufacturing Flash PMI came in at 51.4, below the August read of 52.0.

The U.S. dollar rose slightly against a basket of currencies

European markets saw cuts of upto 1.2%. Euro zone PMI showed that business activity in the 19-country region fell to a near two-year low at 52.6 in September versus 52.9 in August and below market expectations.

For the week, Dow added 0.8% while Nasdaq and S & P 500 rose 1.2% each. European markets soared 3%-3.6%. Asian markets gained 1%-1.5%.

U.S. presidential nominees Hillary Clinton and Donald Trump are set to go head-to-head in their first debate on Monday in the U.S.

AT HOME

After trading in a narrow range for better part of the day, benchmark indices slipped sharply in the late noon trade to end lower by four tenth of a percent, breaking two-day winning streak. Sensex lost 105 points to settle at 28668 while Nifty finished at 8832, down 36 points. BSE mid-cap and small-cap indices however, gained 0.3% and 0.1% respectively. BSE Bankex was the top loser among the sectoral indices, down 1.2%, followed by 0.7% cut in Utillities index. Realty and Energy indices were the top gainer, up 1% and 0.9% respectively.

FIIs net sold stocks and stock futures worth Rs 300 cr and 349 cr but net bought index futures worth Rs 389 cr. DIIs were net buyers to the tune of Rs 496 cr.

Rupee appreciated 1 paise to end at 66.65/$.

For the week, Sensex and Nifty gained 0.2% and 0.6% respectively.   

The Goods and Services Tax Council, in its second day of meeting, has struck political consensus on the GST threshold limit which has been set at Rs 20 lakh. For North-Eastern and other small states, the limit is Rs 10 Lakh. If a trader's turnover is less than the threshold limit per annum, he won't be covered under the indirect tax reform. The financial year ending March 31, 2016 will be the base year for making revenue projection. The Council will meet again on September 30 to finalize draft rules on exemptions. It will meet between October 17-19 to discuss rates.

SEBI board meeting on Friday amended the regulations for infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) to facilitate their growth and allowed foreign portfolio investors (FPIs) to directly trade in debt markets.

OUTLOOK

Today morning Asian markets are trading with cuts of upto a percent and SGX Nifty is suggesting about 35 points lower start for our market.

In Friday's report we had mentioned that "Yesterday, Nifty, after a big gap-up opening at 8873, touched a high of 8893 in the initial trade, but failed to hold at higher level and finally settled at 8867. Usually, the first-hour high on a gap-up day works as the immediate hurdle and therefore one would want to see the crossover of 8893 as a proof of strength".

The benchmark, after touching a high of 8885, slipped to end at 8832 and is set to open lower today.

8790 continues to be the immediate support, a sustained trading below which would generate a sell on the hourly chart and can take Nifty to 8690. On the way up, 8893 continues to be immediate hurdle above which, 8970, the top made in early September, would be the bigger resistance to eye.

Traders are advised to keep stop-loss of 8790 in long positions.