Premarket analysis: 30 June 2020
Global markets went up but stayed within consolidation zone
DIIs continued to absorb profit booking by FIIs
WHO says worst is yet to come for Virus infections
Blackrock downgraded emerging market equities to underweight
India China border tension is spreading to trade and commerce
Global Markets: -Sideways coil
US and European markets recovered yesterday from lows of the consolidation range. The High yield bonds and emerging market currencies fell yesterday while emerging market equity ETFs traded in US was mostly flat. Safe haven assets Gold continued to raise while Japanese Yen fell and dollar index were flat.
Global asset manager and hedge fund Black rock downgraded emerging markets to underweight because EM governments do not have much room to spend more to lift economy out of recession.
ASIAN Markets this morning: - Slightly up
Most of the Asian markets are up this morning but they are still within the consolidation range. European and US futures are trading flat in the Asian trading session. SGX Nifty is trading about 50 points above the Nifty future’s yesterday close and almost flat comparted to Nifty spot close
Fiscal deficit, infrastructure output and India’s external debt numbers will be released today. Prime Minister will also be addressing the country by 4.00PM today.
India: -Still on sideways coil
Blackrock downgrading emerging market equities and FIIs’ continues selling in cash market are negative for Indian markets. Border tension between India and China is beginning to affect trade and commercial relationship. India is staring to ban / restrict Chinese products, services, and software. China may start retaliating soon. However positive global mood today may help the markets.
How will Nifty perform today?
Global risk-off mood is alive and FIIs have been booking profit in Indian markets. This has pushed Nifty into sideways chop for couple of days now. FIIs selling is unlikely to stop while DIIs may continue to absorb FIIs selling and support the markets. I expect markets to open flat or positive today in line with Asian market openings. During the day markets may see profit booking at the higher levels.
There are no heavy weights declaring results today.
NIFTY -Technical Bias:
Price Action & Pattern:
Nifty has been throwing up indecisive doji candles for three days now. The market seems to have support at around 10180 and resistance at around 10420. Therefore, any breakout from this range could show us the direction of the trend. As of now there are no triggers for the nifty to break the range. However, Nifty is on sideways coil for two days now therefore news flows and global market directions should be watched for possibility of range break out.
Stock charts with clear price action:
Axis bank is showing bearishness after it was downgraded by the rating agency Moody’s to “junk” grade
As of now pull backs could be used to go short till decisive break above 10500.