ICICI Sec: India Strategy - Open neutral and remain range bound

Key Points
􀂃 Market outlook — Open neutral and remain range bound
􀂃 Positive — US existing home sales
􀂃 Negative — Weekly jobless claims
Market Outlook
􀂃 The Indian market is expected to remain range bound with an opening with a
neutral bias on the back of weak opening among Asian peers and negative
closing in the US markets. The Indian market continued to extend their
previous session's losses as lacklustre global cues along with profit taking at
higher levels weighed on investor sentiment. On a sectoral basis, a sell-off in
realty, banking, oil/gas and telecom shares were the major draggers while
defensive FMCG stocks limited markets downside. The Sensex ended down
80 points or 0.4% at 19,861 while the Nifty ended down about 31 points or
0.5% at 5960. The Sensex should find supports at 19770 and 19640 and
resistances at 19930 and 20000. The Nifty has supports at 5930 and 5900 and
resistances at 6010 and 6040
􀂃 On other major developments domestically, India's annual food inflation rose
an annual 15.46% in the week to September 11 against a 15.10% rise a week
ago. The government cut its borrowing programmed by Rs 10,000 crore and
allowed FIIs to put an additional $10 billion in corporate and government
papers. This move is expected to improve bond market volumes and
increase further capital flows
􀂃 US markets fell after depressing weekly data on the labour market providing
negative sentiment among wary investors and raised concerns about
headwinds faced in the labour market. Though the existing home sales data
improved, it could not bring cheer to the market. The markets have been
trading in unusually weak volumes with yesterday being no different and saw
volumes close to 34% below last year’s estimated daily average of $9.65
billion. The Dow edged ended down 77 points, or 0.7%, at 10,662. The S&P
500 Index finished down 9.5 points, or 0.8%, at 1,125. The Nasdaq
Composite Index fell 7.5 points, or 0.3%, at 2,327
􀂃 Stocks in news: IVRCL Infrastructure & Projects, Jet Airways, KPIT Cummins,
Larsen & Toubro