Positives:
Global markets ended in positive note on Friday. Asian Markets are also up
US did not impose harsh sanctions on China or withdraw from their trade deal
Purchasing Manager Index pulling back from bottom for countries that opened economy earlier
FIIs mostly bot for the whole of last week
Negatives:
India’s GDP for the last quarter was sharply lower but managed to beat estimates
Political risks are showing up but still under control.
- Hong Kong, India-China Border stand-off & escalation in US protests
Global Markets: Positive
Global markets ended positively on Friday. While European markets ended in green, US Dow Jones where traders expected harsh sanctions on China, pulled back from lows and ended almost flat. President Trump did not come good on his threat of strong action on china over Hongkong. That was a big relief for the global markets. The US Dollar is down and other risk assets are up including MSCI emerging market ETF. Gold was also higher but mostly due to lower US Dollar.
ASIAN Markets this morning: - Relief rally
No harsh sanctions on China from US and that was a big relief for markets that depend upon china for its exports. Asian markets are on relief rally. Indices from Japanese Nikkei to Indonesia are up this morning. The European and US futures are also up in the Asia trading session. SGX Nifty is up more than 100 points from Fridays’ Nifty close.
Calendar events
India’s Purchasing Manager’s Index (PMI) will come out by 10.30. Expectation is 38 Vs 27.4 last month. PMI of Asian markets that opened up their economy earlier such as China and Malaysia are up sharply while other economies continue to shrink. This give confidence that other economies will also bounce back sharply once corona restrictions are eased.
India: -Pull back rally continues
Indian government is playing down the border stand off with China and both countries are trying to resolve it through dialogue. The lockdown measures are being eased further from today. This along with global and Asian market sentiment should help Indian markets today to continue their up move. FIIs seems to have bought the bottom and were net buyers for the last week.
Result announcement:
VGuard will announce its results today while Britannia, Indigo and Motherson Sumi will release their results tomorrow.
NIFTY -Technical Bias:
Price Action & Pattern:
The positive sentiment will likely take nifty above Friday’s range and break out of 9600 resistance. Next it could approach 9800-10K range this week if the positive sentiment holds and FIIs continue to support. On the Downside, its good as long as 9180 holds.
Trade Ideas:
If the market gaps up more than 100 points, its better to wait for the pull back to go long.
