Yesterday, the Sensex lost 277.16 points or 1.60% and closed at 17,096.68. The Nifty ended down 90.25 points or 1.71% at 5,200.60.
The futures and options (F&O) contracts will expire this Thursday. CNBC-TV18, managing editor, Udayan Mukherjee sees the Nifty in 5,200-5,400 range before the expiry.
According to him, today the Nifty will bounce back above the 5,200 mark.
Below is the edited transcript of his comments on CNBC-TV18. Also watch the accompanying video.
Today is an auspicious day of Akshaya Tritiya. So, we wish everybody across the country. It’s a good day for gold. It looks like it may not be a bad day for the market either.
Last couple of days have been pretty bad, but today led by TCS, which declared very cheerful numbers, and global markets, which seem to be stabilising in Asia this morning, we should get a pullback atleast in the morning. We should keep our head above the 5,200 level which we violated in trade yesterday.
On global markets:
The way Europe was moving yesterday, it looked like we are about to see a sort of a melt down in global markets with a massive risk off phase. But the S&P is hanging on around 1,365. So, it’s not like it is collapsing. You would have to say that despite all the turbulence of last week in terms of news flow, US markets atleast have held their own.
Also if there was pronounced risk off then crude would have cooled off more. The crude is still holding very closely to USD 119 per barrel. So, I don’t think we have gone to a complete risk off kind of situation in global markets. The dollar index has not got anywhere close to 80 or beyond. So, I don’t think any of these indicators, which we track, are indicating that the markets globally are moved on to risk off mode.
Europe has a problem. What started with Spain went to the French election results and now there is a Dutch problem. So, I think there is political uncertainty now and particularly with reference to implementation of those austerity package which they signed off on across Europe. So, Europe will probably remain quite turbulent. It’s come back as a risk factor on the table after a few weeks. So, global markets are uncertain and edgy.
Are they collapsing in a heap? That is not visible yet. This morning you can see that Asia is trying to pull back a little bit. So, we remain in choppy terrain. I think investors are still not very keen to give up on the markets upmove. They want to liken this phase as a consolidation phase for the market rather than a collapse phase. So, let’s see how things move from here. But this morning it could have been worse, you could have woken up with a 250-point cut on the Dow and then the markets would have broken that support level, but maybe we will not atleast for the morning.
On the Nifty:
Last couple of days have been quite bad, not just the Nifty, but the way the broader market is moved has not been encouraging at all. High betas got smashed up with infrastructure, real estate names falling off in a heap. So, I think that internals of the market have not looked very good for the last couple of days. Even flows have not been very encouraging. Yesterday, we had negative figures from the FIIs both in cash as and futures.
I think we are still in a bit of a range. Again we have made that journey to the lower end of the trading range. This morning we will bounce off from there, maybe we get to 5,250 kind of levels again. So, before the expiry, it looks like we are still tossing in that 5,200-5,400 range without any kind of resolution. I know it’s frustrating. But that’s the way it is for the markets. This morning if people or the bears were hoping that the will breakdown 5150, I think their wait just got longer. We will probably see a bit of a pullback now away from that support level and then see how Europe opens up. If there is small recovery in Europe because it fell off so hard yesterday, maybe we will stay still close the day above that 5,200 mark.