It’s been a topsy-turvy week for the indices. The Nifty has come back to the lower end of its trading band thanks to Infosys yesterday. But the mood today will be a bit better after what TCS had to say last evening.
Global markets, however, continue to remain quite edgy, so it doesn’t look like the market can forge a major recovery this morning.
A few days back there was some optimism after the Euro Summit, because belief was that at least for the near term the band aid was working. But it is unraveling all too quickly, so once again the yields have started moving higher, the downgrades are coming in thick and fast and the euro is just not able to get its way past 1.23. All this remains a little disconcerting for global risk on generally speaking. The fact that Brent crude has also gone back above a USD 100 a barrel is a little bit of a discomfort on the margin for India as well.
Even yesterday, while foreign institutional investors (FIIs) remained buyers on the cash market, there seemed to be signs of shorting picking up in the futures market again. So there may not be any impetus from the global side for the July series. Indian equities have got to do their own bit, and in that context Infosys was not great yesterday. Only if policy picks up towards the second half of the series will we get past 5,400, or else it looks like we are trapped in a range for a bit longer because of the global cues.
The range may be 5200-5400; the market looked like it was going to take out 5400 a few days back, but again it stalled around 5350 and this morning starting closer to that lower end of the trading range of 5200. So it looks like we are on our way to filling that gap that was created post the Euro Summit in a technical sense. We’ll have to see if the Nifty finds support in this 5200-5150 lower end of that gap and then still works within that trading range.
That may well happen if the grapevine talk of a diesel price hike for which the government seems to be flying kites now and trying to build consensus. If that comes about next weekend, then the market may not break the lower end of that trading range band. But if for some reason there is disappointment there and global cues continue to be edgy, then that might be a challenge. For now we are still in a trading range pending news cues which will come out in the next five-six days.
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