It's the last trading day of what’s been a very tepid week for our markets; the last few weeks have been good. But this week has been very average, volumes have been low, and prices have been grinding down. To be sure there is no selloff. But it’s been a sticky kind of week for our markets.
On the last day of the week, we will get inflation numbers as always and those promise to be above 7%. The US was flattish, it held out but Asia is not making a whole lot of it this morning; we have seen cuts across many markets across Asia. So let’s see whether we can sort of have a flattish close to the week or we need to lose some more ground.
We will grind in a bit of a range today. This week has been not great for the markets; we have not gone down to those 5,000 kind of levels and it may just be a pullback from the very sharp rise that we have seen in the last few weeks. But even so, I think global markets are looking just that little bit shaky over the last few days. Crude at all time highs every day is not pretty comforting; so it is a moot point on whether we need to give up a little bit more ground and consolidate or we can just hang around these levels, let us find out.
Asian Indices:
Asia is not looking particularly strong this morning; the Hang Seng is down nearly 400 points, Japan is down 200 points, China which started up is down 2%, Korea is down 1.2%. So most markets were in the green and they have all tumbled into the red these are not very good cues for us this morning.
Any takeaways though from a week like this one?
No, none. It is quiet inconclusive now, it is that kind of gray zone where you do not have a trend and you do not have conviction. Traders will not have conviction either on going long or on going short knowing that they can reasonably play surely for 150-200 points on the Nifty. So that is where we are stuck right now.
Even the guys who believe that the market might ease off a little bit are not quite convinced after what they have seen in the last few weeks that the market will go to 5,000, break 5,000 and seek lower levels. So they may think one way but I suspect they will not act with great conviction on the way down because of what has gone on over the last few weeks.
Equally on the way up I think having retraced-can the trader save his great conviction that of course I have got a dip, I will go out and buy now at 5,050 and ride the market back to 5,300 or 5,400. I think that conviction is also lacking, so we are in a gray kind of zone right now perhaps a reason why volumes have tapered off quite a bit in the last couple of days because there is just no conviction even from a trading perspective, leave alone an investment perspective.
It is not helping that global markets also have become very tepid over the last few days. You would note that those days of coming in the morning and seeing 2%-3% moves either way those are gone. Right now everything seems to be a slightly more stable keel. I suspect the call on the Nifty would have to be that we will spend the day unless there is any great surprise from inflation between that 5,000-5,100 mark, that 100 points range in the Nifty should hold for the day, closer to 5,000 if it gets there because of the early morning weakness you could see the shorts covering up or some initiation of longs but I think around 5,100 people will not have that conviction. So we may just be a bit volatile within a 100-point range on the Nifty today.
On internals:
What is discomforting is what is going on with the global flows. We just got the sense a couple of weeks back that FIIs might just be feeling a bit more relaxed about emerging markets in India but yesterday’s provisional figures are quite disturbing . Nearly Rs 1.200 crore of Nifty Futures selling, Rs 700 crore of provisional cash market selling, so forget the options but even those together account for half a billion dollars of Nifty Futures and cash market selling. That is quite a lot in the cash market selling which is Rs 45,000-50,000 crore of trade everyday.
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