Premarket analysis: 07 July 2020
Risk on Mood in global markets
Asian equities are holding gains
FIIs bot in cash market & gone net long in F&O
China-India border situation is cooling off
Muted expectations for upcoming result season
Global Markets: -Positive
US and European markets ended in green. They are trying to break out of recent swing tops. All risk assets such as emerging market ETFs, high yield bonds are rallying. Industrial metals are going up along with Chinese stocks. Gold is holding its gain and is on sideways coil. Japanese yen and dollar index fell. The volatility index is continuously falling.
ASIAN Markets this morning: - Positive Open
Most of the Asian markets opened in green this morning. Major Indices are currently falling back and trading flat compared to yesterday’s close. European and US futures are trading flat as well in Asian session. SGX Nifty is trading about 20 points below Nifty futures' close yesterday.
There are no important economic data scheduled for release today.
India: -How far will it go?
FIIs have been buying in cash market for two days. However they were net-short in Index derivatives. Yesterday, both FIIs & proprietary traders reversed their position, went net long on Index futures and options (based on open interest). This also explains the reason why futures discount vanished yesterday. Overall every category of participants seems to be optimistic.
How will Nifty perform today?
SGX Nifty and Asian markets indicate a flat to slightly negative opening. However, Nifty is still far away from all-time highs, hence it has some more room to run. Overall positive market mood is not likely to turn negative immediately. Any dips in the market are likely to be bought.
There no heavy weights declaring results today.
NIFTY -Technical Bias
Price Action & Technically important levels:
10500 is likely to act as a good support. The index after initial hesitation move towards 10850 again and if it is broken, it could go further towards 11K.
Support: 10500 / 10400
Continuation of bullish spreads are appropriate