Large fiscal stimulus announcement
Re-opening of economy
Global market mood is negative
Details of large fiscal stimulus should not disappoint the markets
Global Markets: - Negative
US markets closed in red overnight and volatility increased. European markets closed flat yesterday. The Emerging market ETF traded in US continued to slide.
ASIAN Markets this morning: -Trading with negative bias as well
Asian markets this morning is trading in negative territory. SGX nifty cooled off from overnight exuberance and currently trading about 200 points up.
Calendar events - Disappointing Industrial production numbers
Industrial production disappointed with print -16.7% Vs estimates of -8.7%. Consumer price inflation numbers were not released due to lockdown and inability of statistics department to collect information. However, food inflation numbers were released which increased to 10.5 %
India: Stimulus amounting to 20% of GDP . Is this for real?
Surprise announcement from government that its is working on fiscal stimulus of about Rs.20 Lakh crores which is equivalent of 20% GDP lead to huge spike in SGX Nifty yesterday. It touched the high of 9680 before cooling off this morning.
Two proverbs come to mind one is “Devil is in detail” and the other one is “There are no free lunches”. Government of India’s deficit is already hitting the roof and rating agencies and economists are growing uncomfortable. Therefore, it remains to be seen, how this stimulus will be funded and what are the details of the stimulus package.
Result announcement: Few heavy weights declaring results today
Few heavy weights are declaring their numbers today. Maruti, Kotak Bank, Godrej consumer products will declare their quarterly numbers today. Escorts, Biocon, Tata consumer will declare their numbers tomorrow.
NIFTY -Technical Bias: - What matters today is euphoria and FOMO
Price Action & Pattern:
Price action of yesterday is not important today as markets will be reacting to surprise announcement on fiscal stimulus. Therefore market is expected to gap up by more than 100\+ points. However traders need to wait for the details and market euphoria to die down before taking any position.
Wait for the details of stimulus and avoid trading the initial euphoric reaction in the morning