Global Markets: - Virus panic receding
This week starts
- as corona panic continues to recede
- US is faced with record job losses and unemployment numbers
As the economies are opening up slowly, call for more and more stimulus and financial support for people are growing in developed markets and also in emerging markets. The highest job losses in US history is also raising expectations of negative interest rates in US.
India: - Good and Bad
The most important news that came out by end of last week was higher government borrowing. India government raised its market borrowing plan by Rs.4 Lakh Crores to Rs.12 Lakh Crores. This is expected to raise fiscal deficit from budgeted 3.5% to 5.3%. We don’t know how global rating agencies will react to this number, any negative remarks could cause damage to wider markets specifically to bonds and Indian Rupee.
On the bright side,
- RIL’s debt reduction plan received thumps up from global investors. Reliance Jio is able to attract new investors almost on daily basis.
- ICICI Bank reported its results on Saturday and managed to achieve decent numbers in spite of USD 100mn hit it took from a Singapore oil trader client.
- Government is talking about some serious structural reforms to manage recession. A few state governments have suspended labor laws to encourage economic activity.
Industrial production and consumer price inflation numbers will be out on May 12. India’s industrial output is estimated to fall by 8.7%. Consumer price inflation is expected to fall to 5.68% Vs 5.91%
NIFTY -Technical Bias:
Price Action & Pattern:
Nifty has been on sideways movement for few days barring a breakout attempt on 30 April. My custom indicators are also not showing momentum or divergence. My momentum indicator is pointing towards "0" which means momentum is falling. Therefore I would not be surprised if nifty stays sideways for few more days. I would wait for it break out or break down.
However, Pharma sectoral index is showing some life, it shows small momentum and direction. Therefore, its worthwhile to look at stocks in pharma sector for long trade this week. But that is with a caveat that Nifty should also start moving upwards.
For further details, please visit https://youtu.be/LwTAeedTIzo