The financial markets has been on a sideways consolidation mode for a long time . The major macro factors influencing the markets are :
The factors specific to India that will influence the markets are :
All these put together is the ideal recipe for increased volatility .
The terms volatility is mostly associated with Risk . However in case we are able to predict the direction of volatility it can provide trading opportunities .
Also for long term investors it provides the opportunity to buy their desired portfolio at discounted prices !
With stable Oil prices and a dovish Fed , markets seems to have formed a base for further rally . However we will continue to see intermittent corrections and profit taking .
In absence of any major domestic triggers Indian equity markets will follow global triggers. We will see more stock specific action going forward , as there we are already having some portfolio churning in light of the quarterly results .
Stocks like Tata Chemicals , Rallis India looks strong in view of the good monsoons anticipated .
Equity markets are going through a phase of consolidation . However the overall trend remains positive . As market awaits new triggers US job data will be keenly watched .
In case of better than expected job data US dollar may regain some of its lost ground . However the overall bullishness will see markets rally .
The passing of the bankruptcy bill is a great positive for the Indian economy. This will increase the business convenience for doing business in India. The policy actions will help the economy to reach its true potential .
US equity markets recovered after Friday’s fall , supported by weak dollar . Asian markets looks stable tobay .
The correction in Indian equity market continues. However in view of the good monsoons , this is buying opportunity for the investors.
Stocks dependent on rural growth are already on the upmove . One may look at stocks like Tata Chemicals which is yet to join the rally .
May has started with major weakness across Asian markets. Markets assumes that Japanese Central bank will come with more stimulus. As we have mentioned in the past the room for further stimulus was limited for Japan . And the central bank wanted to hold on to it till it can !!
However market positions had to unwind and thus Yen strengthened against USD. This caused major sell off in the Japanese equity market as most of the companies depends on exports for their earnings .
We will also have Australian central bank policy decision today , which will be keenly watched by the market .
India equity markets may soften in line with other Asian markets.
The immediate triggers that can support the Indian market are :
Nifty traders should cut their long positions and wait for the market to stabilize.
Commodity stocks may cool off after the recent rally .