10000 IS THE UPSIDE HURDLE; 9860 IMMEDIATE SUPPORT

10000 IS THE UPSIDE HURDLE; 9860 IMMEDIATE SUPPORT

WORLD MARKETS                             

While Dow gained 0.1%, S & P 500 and Nasdaq fell 0.2% and 0.6% respectively on Friday with energy and information technology contributing the largest losses.

Hurricane Irma was downgraded from a category 5 to a category 4 early on Friday, but the head of the Federal Emergency Management Agency (FEMA) warned that the storm will "devastate" parts of the country

Wholesale inventories rose 0.6% in July, more than 0.4% expected and nearly matching its biggest gain in six months recorded in June.

European markets ended mixed with modest changes. Basic resources stocks fell, as metal prices like copper, nickel and lead all posted sharp losses. Miners were under pressure following softer-than-expected export data from China.

For the week, US indices fell 0.6%-1.2%. In Europe FTSE and CAC fell 0.8% and 0.2% respectively but DAX gained 1.3%. In Asia, Shanghai gained 0.2% but Nikkei plunged 2.2% and Hng Seng fell 1%.

China August producer price inflation rose 6.3% y-o-y, above July's 5.5% level and beating the 5.6% forecast.

News reports over the weeked suggested the European Central Bank is weighing an option to to reduce its bond-buying to 20 billion euros or 40 billion euros a month from the current 60 billion euros.

China's central bank intends to remove requirements for financial institutions to set aside foreign-exchange risk reserves for trading yuan forwards.

AT HOME

After rising about a third of a percent in the initial trade, benchmark indices gave away most of the gains through the choppy session to end just marginally higher. Sensex settled at 31688, up 25 points while Nifty added 5 points to finish at 9935. BSE mid-cap and small-cap indices lost 0.4% and 0.1% respectively. BSE Capital Goods index surged 1.9%, becoming top gainer among the sectoral indices, followed by 0.7% higher Industrial index. Realty index was the top loser, down 1.5%, followed by 0.9% lower Healthcare and Power indices.

M & M plunged 3.4% ahead of tomorrow's GST Council meet, which is expected to consider cess hike on SUVs and luxury cars.

Dr Reddy tumbled 2.9% after its Duvvada facility received six major observations from German health regulator.

FIIs net sold stocks and stock futures worth Rs 256 cr and 61 cr respectively but net bought index futures worth Rs 119 cr. DIIs were net buyers to the tune of Rs 488 cr.

Rupee appreciated 26 paise to end at 63.79/$, an over one-month high.

For the week, Sensex and Nifty lost 0.6% and 0.4% respectively.

GST Council on Saturday raised the cess on mid-sized to large cars and SUVs in the range of 2-7 percentage points but kept the tax burden lower than pre-GST levels. The council also reduced the GST rate on about 30 commonly used products.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.2%-1.5% and SGX Nifty is suggesting about 30 points higher start for our market.

As we have been mentioning, Nifty is in a consolidation mode after hitting a low of 9685 on 11th August. An upward sloping trendline adjoining recent bottoms on the daily chart is placed around 9860, which also coincides with 20-DMA, making 9860 an important immediate support.

On the way up, an upward sloping trendline adjoining tops made in mid-August and early September presents a resistance around 10000, making it an immediate hurdle. Above 10000, 10088 and 10138 would be next upside targets to eye.