Global markets look stable, risk rally may extend: Udayan

Udayan Mukherjee, managing editor, CNBC-TV18 says, things are stable globally, no great rallies overnight, but atleast they are mostly in the green. "After all the turbulence of last week, nerve seems to have settled in global markets. We seem to have entered far more steady and stable trajectory out there," he adds.

According to him, it is a mildly more risk-on kind of phase in global markets. “If you look at the internals of those markets, they seem to be more supportive of some extension of this risk rally globally,” he adds.

He further says, it is difficult to call whether 5,350 gets taken out immediately, it will depend on global markets.

Below is the edited transcript of his comments on CNBC-TV18.

Things are stable globally, no great rallies overnight, but atleast they are mostly in the green. So, after all the turbulence of last week, nerve seems to have settled in global markets. We seem to have entered far more steady and stable trajectory out there. That is good news for us because we have pulled back almost to 5,300. Now, as we negotiate the recent talks, we seem to be getting some global tailwind.

On the global markets:

Things seem to have settled down a little bit. Last Friday, the mood was distinctly bad. But it seems to have improved on Monday. Generally, the refrain coming in from Germany, which is what most markets are riding on, after all their hawkish comments last week, they seem to be now in tacit agreement with what Mario Draghi said. I think the coin would have dropped. So, I guess that is what European markets are feeling much better about.

The euro has gone back to 1.24 which is supportive for risk and the dollar index has cooled down. Yields have once again softened quite considerably in Spain and Italy. So, if you look at the internals of those markets, they seem to be more supportive of some extension of this risk rally globally rather than the death of that rally as it appeared on Friday.

It is not to say we are off to the races, but if you are saying between risk-on and risk-off, I think right now it is a mildly more risk-on kind of phase in global markets.

The only problem is that it is lifting other things like crude, which we don’t want to be lifted and that is nudging USD 110 per barrel again. So, that remains the sour point but that is inevitable, once you are participating in a risk-on phase.