European and US markets consolidate at near swing highs
FIIs moderated their sales in cash market
Asian Markets trading negative territory
Uncertainty in India-China border stand-off
Global Markets: Consolidation
Both US and European markets consolidated near their swing tops while Europe ended with a small positive, US markets ended in small negative. European and US futures are trading in negative territory this morning. Emerging market asset ETFs were up in the US yesterday. However Japanese yen continues to gain for third day. The Dollar index and gold consolidated. Copper continues to trend lower.
ASIAN Markets this morning: - consolidation with negative bias
Asian markets are trading in negative territory. Most of the indices opened flat but went down soon after and are currently trading sideways. SGX nifty is trading about 100 points below Nifty’s yesterday close.
There is no significant calendar event planned for today as well. Forex reserve position, deposit and loan growth will be released tomorrow.
India: Border uncertainty continues
There is an uneasy calm after the escalation of border tension with China. While news flow suggest that both governments are trying to de-escalate the situation, as retail investors /traders we will never know the ground situation until it is too late. The good news is that FIIs who sold heavily both on bond and equity markets day-before yesterday, moderated it yesterday. The net sell position was smaller. I feel, FIIs may not sell much in the coming days as well. Both India and China are likely to calm the nerves diplomatically.
How will Nifty take all this opposing pulls and pressures today?
Uneasy calm in the border, consolidation in global markets and weekly expiry, all points to whip saw and volatile consolidation in the markets today. Markets can go back up above 10k if there are more de-escalatory news come out from Indian government. However, that is only a remote possibility given the anger among people on china’s aggression. Therefore, I expect markets to consolidate with negative bias.
There are no heavy weights declaring results today. Result announcement are coming to a close.
NIFTY -Technical Bias:
Price Action & Pattern:
9700 levels seem to be still a good support while upside is capped at psychological level of 10k. Unless there is strong de-escalatory message from government, I expect Nifty to trade between 9700 and 10K with bit of whipsaw.
Those holding spreads that benefit from sideways market and raising volatility could hold till either side of the support or resistance is broken decisively. Expiry day whipsaw should be watched for entry opportunity.