Nifty:
In early trade, Sensex fell over 250 points while Nifty fell below 7750 levels amid fresh worries about China. Activity in China’s factory sector unexpectedly shrank to a 6-1/2 year low in September. Expectations of a rate cut expectations of a rate cut from the Reserve Bank of India also drove gains in banking and real estate stocks. A 25-basis-point rate cut from the RBI is already factored in by the market but what surprised the market is 50 basis -point cut by the RBI. Market felt some relief after a positive statement by the Chinese Premier ” here was no basis for continuous depreciation of yuan”. In September, foreign funds have sold shares worth nearly Rs 3,000 crore so far. Today FII s were the net seller of 1330 Cr.
Technically Nifty is trading under its crucial resistance of 8050 levels and any bounce in the market is purely a short covering. We assume Nifty to expire September series near 7940-7970 levels.
Currency:
The Indian rupee extended losses for the second consecutive session on Wednesday. The currency breached 66-mark against dollar in early trade, down 14 paise to 66.02 per dollar compared to 65.88 a dollar in previous session. The Reserve Bank of India today fixed the reference rate of the rupee at 65.96 against the US dollar and 73.37 for the euro as against 65.62 and 73.26, respectively, yesterday.The domestic currency had fallen 15 paise against the greenback to close at 65.88 in the previous session on sustained dollar demand from banks and importers.
All eyes are waiting for an upcoming RBI rate decision. 25 bps is already factored in hence any further rate cut would help INR to gain against the USD. Chances are bright that US Fed may start hiking interest rates in December.The authorities in India are taking remarkable measures to prop up its economy and sparking efforts are taking place at both ends- fiscal and monetary sides.
Technically USD INR will remain in a tight range between 65.44-66.40 levels.
Commodities:
Gold prices are modestly higher in early U.S. trading Wednesday, on a short-covering bounce in the futures market and some bargain hunting in the cash, following the selling pressure seen on Monday and Tuesday. December Comex gold was last up $4.90 at $1,129.60 an ounce. December Comex silver was last up $0.044 at $14.80 an ounce.old opened steady this morning and is trading around 26260 on MCX October contract. Prices erased some of last week’s gain on yesterday, however it is not likely to witness a sharp fall. Prices have good support at 26150 and resistance at 26400 level. Traders are advised to use buy at lower level strategy. Several Fed officials have since said they would still like to raise interest rates this year, placing a cap on gold’s rally. Higher interest rates make gold less competitive with interest-bearing securities.
China’s much-anticipated report on manufacturing was downbeat Wednesday. The Caixin manufacturing purchasing managers’ index (PMI) fell to a 6.5-year low of 47.0 in September from a final figure of 47.3 in August. A reading below 50.0 suggests contraction in the sector.
Crude Oil opened with a positive note and trading around 3075 on MCX October contract. Crude Oil inventory data is scheduled to release today and storage is likely to decline as per the estimate. Prices have good support at 3050 and 2980 levels and resistance at 3100. It is expected to trade higher in today’s session till 3125-3142 levels.