Premarket analysis: 16 July 2020
US European markets are positive
Risk assets closed in green yesterday
Hope on vaccine for virus
Both DIIs & FIIs are booking profits continuously.
Global Markets: -Positive
US markets and European markets ended in green yesterday. US Dow jones broke out of tight range. Risk assets such as emerging market ETFs, Government bonds and high yield bonds rose yesterday. Industrial metal-copper is consolidating after a fast and furious raise. Safe havens US Dollar and Japanese yen continued to be subdued. Gold is holding on to its gains. VIX index cooled off and commenced its down trend
ASIAN Markets this morning: - Mixed
Asian markets are trading marginally in red and consolidating yesterday’s gains. European and US futures are trading slightly in red as well in the Asia session. SGX Nifty is trending down after opening above 10700 this morning. Currently it is trading almost flat compared to Nifty futures’ close yesterday.
There are no significant economic data release scheduled today.
India: -Profit booking continues
Nifty after raising in the morning session yesterday, witnessed heavy profit booking by both DIIs and FIIs in the afternoon session. DIIs, FIIs and large proprietary traders continue to be short in the index derivative open interest. However, If incoming quarterly results surprises and turns out to be better than expectations, the market sentiment could quickly change and the institutions will have to cover their shorts.
How will Nifty perform today?
Although global and Asian equities are performing better this week, Nifty and Bank Nifty has been witnessing heavy profit booking by institutions so far. Traders need to watch out for moderation in profit booking for potential reversal.
Infosys result yesterday was better than expected. Initial trend looks like expectations of sharp fall in quarterly profit may not come true. L&T Finance holding and Bajaj consumer will declare their results today
NIFTY -Technical Bias: Negative bias
Nifty price action:
Nifty continues to trade with negative bias. However, it is still holding on to its range of 10450-10850. Today the index may trade above 10450 and higher levels may witness profit booking. However traders need to watch for short covering spikes.
Spreads that work in a range bound markets are appropriate till index breaks below 10500/450