Asian markets looks set to recover some of their recent losses today . Oil prices seems have found a bottom at usd 30 and have been constantly resisting any sell off. US markets started weak but recovered from their lows to close in the positive territory .
Indian equity market may see increase in volatility today . With the expiry of Feb series and Railway budget the markets looks set for big swings .
As the expectations are very low from the budget we can expect a post budget rally if the global situation stabilizes .
We have seen some interesting developments on Oil in the last few days :
Thus though there is some positive developments , the fundamental oversupply situation in Oil will continue.
As Oil prices turns more volatile global financial markets swings between hope and despair . US markets corrected yesterday in line with the global Oil prices. We may see more such sharp movements in the next few days.
In India the budget may not bring much cheer to the market . Any bill that needs Opposition support is destined to fail from being approved .
Rupee looks weak and may slowly drift towards 70 against the USD . Nifty may open weak , however the market is close to some strong support . Thus trades may like to see a clear direction emerging before taking any positions.
Asian markets have opened in the green . Indian equity markets may also move up today .
This week is very important for the Indian equity market . We will have the railway budget which will set the tone for the budget session .
Some of the major global factors to consider for this week are :
This will be a good time for traders to buy stocks linked to the Indian railways. We may see a short term spike in these shares before the budget . However most of these shares may not sustain this upmove after the budget .
Long term investors should look at sectors expected to benefit from the budget like , Infrastructure , Ports , Banking , Insurance and FMCG .
A budget focused on rural development will benefit FMCG companies like Colgate and HLL .
We may also see more announcements on the banking sector . We feel most of the NPA cleanup is already in the price and we can look at quality banking stocks like HDFC and YES bank .
With Oil showing some signs of stability and US data being as per expectations , we can expect the markets to have formed a bottom for now.
In India the budget will determine the next direction of the market. However all is not well on the Indian economy . Some of the concerns that need to be addressed are :
The market mood is like the weather after the monsoon is just over . There is still some rain clouds hovering around and you never know when it will start pouring. The morning may be sunny and the afternoon rainy .
Day traders are better of staying away from the NIFTY and concentrating on share specific action.
Investors should accumulate SBI , ICICI and HDFC . The budget may come with some good news for the banking sector.
Oil prices is trying to stabilize around USD 30 . However given the supply demand situation more needs to be done by the Oil producing countries to support the prices .
US markets moved up yesterday as they were catching up after Monday's holiday.
Indian markets failed to sustain the rally started on Monday and came off sharply .Overall the market continues to make lower tops and lower bottom , confirming the downward trend .
In order for the market to sustain at current levels or move up further we need new positive news flows :
We believe the budget for India will be very crucial this year . It will either make or break the Indian equity market . As lot has said about India growing everyone will waiting to see if action follows words .
On the global front China and Fed will continue to add volatility .
A very happy Valentine day to all our readers! The market today also seems to be in the good mood and ready to reward Investors.
US markets recovered from their lows on Friday. This was supported by rebound in Oil prices and good numbers on the economic front. Asian markets are expected to trade in the positive territory today . We expect Nifty to recover from its lows.
As we approach the Budget we expect positive news flows from the Government of India. Prime Minister launched ‘ Make in India ‘ campaign . With the push from the government and effort to facilitate investment the outlook for the Indian economy looks positive .
China central bank made it clear there is no need for it to depreciate its currency any further. The fear over the slowdown of China has been overdone by the financial markets.
Nifty trades should exist all shorts and enter into long positions . Investors may start accumulating HDFC , L&T , TCS and Tata Motors. The sell of on Tata Motors has made the prices look attractive .
Any upmove in commodity and metals space should be used to exit these sectors .
Fed tried to assure the market , without committing anything. Unfortunately the sentiments seems to have gone sour and may continue to do so. US markets tried for a meek recovery .
Oil continues to fall and the nervousness seems to have spread across the Asian markets. Indian equity continues to decline .
Under given circumstances we can expect increased volatility as the sentiments shift . Traders can continue to remain short with a trailing stop loss.
Investors should look at buying only in small lots . Alternatively they can wait for the dust to settle . INR and USD remains range bound between 68.5 and 67 for now.
US markets tried to stabilize yesterday. As Asian markets open after the holidays it will open lower as it factors in the recent fall in other markets .
The most import factor factor for today will be Fed . As the market sentiments are weak and the market is oversold , we may see a bounce back soon .
Indian equity markets came off sharply . All trading shorts should have strict stop loss in place .
Investors should buy stocks like SBI , ICICI and Infosys with a two year prospective .
On Friday Indian equity markets staged a smart upmove. However global developments may not allow this upmove to continue today. The major events that will decide the direction of the market this week are :
In India the government increased import duty for protecting steel industry . This is good news for the steel sector in India. We can expect some rally on steel stocks.
China and most of Asia will be closed for Chinese New year .
NIFTY traders should square off their longs . In intra day trading short NIFTY with strict stop loss .
INR may not sustain recent strengthening and may move back towards 68 against USD.
The Fed will keep a close watch on the US jobs data and the inflation numbers . In case there is a bit of slowdown , chances are Fed will need to postpone any interest rate hike for now.
The global markets will also watch the Fed action and react to the same .
Oil is struggling to stabilize at current levels. Suddenly all asset prices has got linked to Oil . The fear of low Oil and subsequent destabilization in the economies of Oil producing countries, far outweighs the benefits of lower Oil prices .
Indian equity markets are expected to open in the positive territory . In the medium term the possibility of the market moving up from here is more that any sharp correction .
NIFTY long positions can keep a stop loss of 7150 with a target of 7700 for March series
Oil has successfully bounced back above USD 30. While we have experts prediction ranging from USD 10 to USD 50 , it only reflects the lack of consensus on the demand supply situation .
The fundamentals of Oil is weak and will remain so . However the point to debate is how weak . Commodities like Oil also generate a lot of speculative interest and this forces the price much beyond fundamentals . Thus fall in Oil prices triggers further sales on derivatives side , and if enough traders believe in the correction and join the short selling brandwagon it results in a snowball effect . The opposite happens when the price moves up . All of a sudden stop losses get triggered on the short positions . This results in so called short covering rally .
In the long run fundamentals will decide the market equilibrium . However one has to survive the short term to think of the long term . Thus capital preservation and risk management are the most important cornerstone of any trading strategy .
Indian equity sold off in line with the global sell off. However these are very low levels and any short position may be caught in the wrong foot. Covering shorts and taking your profits may be a good strategy .
One may start building small long positions with buying calls in anticipation of some budget linked rally in Indian equity . But keep an eye on Fed , Oil and China all of which can spoil the part before it ever begins.
The hope of some agreement on production cuts in oil dwindled . In response Oil gave up almost all the gains of the past few days . The markets which had moved up in the past buoyed by Japan central banks negative interest rates and stronger oil prices came down sharply.
In India Indian Central bank RBI spoiled the party . RBI kept interest rates constant . However many felt an aggressive interest rate cut at this point would have provided the required liquidity support before the budget . The banking shares moved up in a bit of short covering . However ny the end of the day , the market was deeply in red .
Indian economy continues to recover . The forthcoming budget will also support the market.
Thus the long term story for India remains intact .
In the immediate short term , the global sell off will affect the Indian equity market .
Traders can initiate NIFTY short positions will strict stop losses.
Indian Equity markets staged a smart recovery on Friday . This is in line with the rally in Global markets after Japan central bank cut interest rates to negative. Banks which maintain excess reserves over the stipulated limit will be charged negative interest rates.
This in turn will inject liquidity in the markets. With central banks of EU and China also promising to inject liquidity we may see a liquidity lead rally.
The central bank of India RBI will announce its interest rates tomorrow. Will RBI reward the market with an interest rate cut ?
China PMI came at 49.4 vs 49.7 in December . This continues contraction is a major cause of for concern .
Nity traders can maintain long positions in view of the liquidity situation and forthcoming Budget .
Long term investors can look at enter the market in the beaten down stocks like SBI , ICICI, HDFC . These are strong banks which will benefit from the overall growth story of India.