Crucial for Nifty to hold 8000 amid global rout & weak macros

Moneycontrol Bureau Though Nifty showed resilience amidst weak global cues recovering 50 points from day's lows yesterday it will be crucial to hold 8000 level on Tuesday. Analysts say negative global cues and domestic macro data may impact sentiment today. Cues to watch out will be the two-day US Fed meeting that begins today. Analysts are not expecting any action from the Federal Open Market Committee, but the central bank could tweak its view on the economy or make changes to its interest rate forecast, when it releases its statement and economic forecasts. Yesterday, equity benchmarks crashed more than 1 percent intraday following selling pressure in global peers and poor industrial output data but showed some recovery in last hour of trade led by Reliance Industries and Infosys. Indices fell for third consecutive session, weighed by banking & financials, telecom and infra stocks. The 30-share BSE Sensex dropped 238.98 points or 0.90 percent to 26396.77 and the 50-share NSE Nifty declined 59.45 points or 0.73 percent to 8110.60. The BSE Midcap and Smallcap also closed off day's low, falling half a percent post improvement in market breadth. About 1463 shares declined against 1108 advancing shares on Bombay Stock Exchange.Foreign institutional investors (FIIs) have bought Rs 4100 crore in cash from start of June while domestic investors net sold Rs 598 crore in cash market yesterday.Weak macro data may also hurt market today as retail inflation rose to nearly two-year high of 5.76 percent in May mainly due to rising prices of food items, including vegetables. This may hold back the RBI from reducing rates in the near term. The Consumer Price Index (CPI) based retail inflation, which measures the rate of price change annually, in April was at 5.47 percent. In May 2015, retail inflation stood at 5.01 per cent. In August 2014, consumer inflation was at 7.8 percent.In global markets, Asia markets fell again, extending Monday's losses, following a lower finish in US stocks as investors looked ahead to central bank meetings in the US and Japan. In Japan, the Nikkei 225 wavered between positive and negative territory before trading down 0.17 percent, after tumbling 3.51 percent on the back of a relatively stronger yen on Monday.The Dow Jones industrial average closed down 132.86 points, or 0.74 percent, at 17,732.48; the S&P 500 was down 17.01 points, or 0.81 percent, at 2,079.06. The Nasdaq composite finished down 46.11 points, or 0.94 percent, at 4,848.44. Gold has hit a 4-week high as driven by rising investor risk aversion. Crude prices continued to decline as gloomy economic prospects in Europe and Asia weigh.

In the currency space, the safe-haven yen holds firm after hitting a three-year peak against the euro and sterling and a six-week high versus the dollar yesterday on Brexit  concerns. The pound resumed losses as new polls indicated support for the UK leaving the European Union.