Positives:
Sharp raise in equity indices and all asset classes this morning with no specific reason
DIIs continued to defend the markets with inflow yesterday
Negatives:
Markets may be turning volatile with sharp up and down moves
FIIs sold heavily yesterday
Global Markets: Sharp up move
Both US and European markets were nervous and traded with negative bias yesterday. However, this morning in Asia session all asset classes are sharply up. There seems to no major news other than US federal starting to implement a bond buying program that was already announced. All risk asset classes are up while US dollar is down. European and US session that starts in the afternoon-India time will offer hint about whether bullish mood in global markets is sustainable or markets are getting volatile.
ASIAN Markets this morning: - All clear and positive
Asian markets are sharply up as well. This is in contrast to the nervousness and negative bias markets displayed yesterday. MSCI Asia pacific index is up more than 2.50% in the Morning and SGX nifty currently up more than 200 points and it is trading above psychological market of 10K
Calendar events
Wholesale inflation numbers will be released yesterday came in below expectations. This is raising expectations of more rate cuts from RBI. The import and export data pointed to continued contraction in the economy. Therefore the economic fundamentals remain week and has no co relation with market movement.
India: Raising tide lifts all boat?
Global markets mood has always been the driving force behind the Nifty movement for some time. The sudden bullishness displayed in the global markets today will have a positive impact on the Nifty opening today. However, FIIs had sold heavily in the last two sessions while DIIs continued to buy the dips and offered support at lower levels.
Will the sudden and surprise bullishness help a sustained up-move in Nifty?
Today’s market will definitely gap up and sustain the up-move in the morning session at least. However, the sudden bullishness seems to have pushed other economic and pandemic problems to the back burner again. The European session that will commence in the afternoon will offer hints about how the FIIs behave. The index may not sustain higher levels if the FIIs choose to book profits at the higher level. Therefore, the sustaining the initial euphoria will depend again on FIIs
Result announcement:
Hindustan petroleum and NMDC will declare quarterly results today.
NIFTY -Technical Bias:
Price Action & Pattern:
After yesterday’s consolidation, the Nifty and global markets seem to be in a hurry to go up further. There I expect market to open in positive territory trade above 9900 today. However only FIIs support and sustained bullishness global markets can only take Nifty above 10200.
Trade Ideas:
Bullish spread is appropriate. However, the price action in the after noon session should be watched for and reversal.
