Global cues flat; July inflation may disappoint mkts

Inflation data for July will be announced today and it may not be a very pretty number for the market. Also, a lot of important midcap earnings would also be kicking in.

So, there will be stock specific action, but as far as the Nifty is concerned, we will have to see if we can make that journey to 5,400 and beyond is the moot point over the next couple of days.

Nothing is going on in most global markets. It is almost like they have gone to sleep. Volumes have just dropped off completely, volatility has dried down considerably, but thing which is worrying a little bit is the way the VIX is crumbling. It is down to 13, I don’t remember when I saw the CBOE VIX at 13.

While in the near-term it is good news for the market that volatility has fallen off, you keep wondering whether it can remain at these kind of depressed levels for very long because it is a five-year low for the volatility index.

You know that at some point, the spike is coming. Now whether it is coming next week or next month or it can remain this low for an extended period of time is the point of debate. But you tend to worry when the markets become so complacent and the VIX falls off so much. It has been in this 14-17 range for the longest time now.

We know that at some point volatility will spike up. This period of calm in the market is the lull before the storm, another big patch is coming up or down, I cannot figure out which way the market will move, but it won’t be this placid for much longer globally.

As far as our market is concerned, at least in the last one hour the interest level perked up a little bit. So, we made that move to 5350. Traders would now be watching if there is a mini breakout. But it is not a forceful breakout that we are looking at. The market is grinding higher, it does not have any great momentum about it, last few days the breath has not been good though it picked up a little bit yesterday.

I don’t think we have a lot of excitement going in our market and the breakout too might just be academic in nature. You move passed a level by 50-60-100 points, but do not make a major thrust on the way up. It appears like that for now. Even the India VIX is lying at a very low level.