Fed meet fails to cheer global markets; Nifty to open flat

The markets are trying to grapple with this key news today morning. There was no big QE3 announcement. Our market has been flat for the last ten days. It looks like it we will se another flat start to trade, even post the Fed policy, said CNBC-TV18’s managing editor Udayan Mukherjee.

The general drift one is getting from all these global central banks is that they are preserving their fire power. They are all saying if things get worse then we will act, so they are keeping it away for a rainy day. That is the judgement call which the market will have to take whether in the near-term we will get consorted global central bank liquidity action or we will only get it if markets and economies turn much worse.

You get a leg down and then the central bank steps in and that is the way global markets probably need to position themselves right now. But one by one, all the events of June are paying out without moving the needle too much for the market. They get discounted in advance and post the event there is very little by way of price action.

Now we all look for action from or expectations from the European authorities over the next couple of weeks and that is about the last global trigger for the next ten days or so. If we get something from the European authorities then the markets will once again start getting onto risk-on mode. But increasingly, the kind of voices that we are hearing from Europe seems to suggest that they will also amble along and take cues from economic data and from the markets per se before they do some kind of dramatic action that lifts the mood in the market.

I think fundamentals are bad for the market now and incrementally for the markets to move high you would need some kind of liquidity support. If that doesn’t come then the market sapped of energy and for reasons to go higher and therefore it gets trapped in a range. So it’s a period of complete consolidation and sideways pattern for the Indian market as well.

One by one the near-term triggers have played themselves out with just about one left. That’s left the market trapped in a trading range. Now within this trading range will we move or stay at the higher end of it as we seem to be now or will we drift lower over the next couple of weeks towards the lower end of that trading range. That is the moot point.

For now people are saying no reason to go much higher from here immediately, but there is no reason to fall dramatically from here either. So the mood is one-off, sideways Nifty but let’s try and see if we can work with individual stocks.

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