Global mkts in bad shape; Nifty to see soft start

Today, Nifty might start the day around that level or a bit below it because global cues overnight have not been great. Asian markets are not very good today. So, given all this it might be a soft start to Friday.

Apart from that, fresh concerns about the PMI data in China and Europe would play bit of a part, but the day before yesterday’s optimism on QE3 has got dampened a bit because of some statements. The market so focused on liquidity right now that its reacting more to those kind of liquidity events rather than any of the macro data, which has not been great for a long time now.

Also, Greece is back in the discussion table, not that global markets are reacting violently to it but the prospect that things might not be very orderly for Greece after all, is something which has come back as a bit of a risk factor. So, that’s keeping European markets a bit edgy over the last couple of days. The euro is holding its ground; it’s not blinked at all and that tells you that global markets are not in a very fragile state at least at this point.

Things could change in a couple of days, if Jackson Hole is disappointing and in the next couple of days the news from Germany on Greece is not great then things might change for global market. Right now yesterday’s fall should be regarded as profit taking after a fairly significant rally or maybe a mild diminishing of QE3 hopes and a bit of Greece on the table. Looking at the currency complex and the fact that the dollar is just not getting its head higher, I do not think risk-on has ended or anything like that.

Our market may get to 5,400, but we saw what happened yesterday - there was a dip and it got swallowed quite easily. I don’t think the markets are in a great breakdown mode immediately. If things change globally then of course everybody will have to take stock of the situation. Also, one thing which the screen is repeatedly telling you for the last few days is that the market is just not reacting to any bad news. It is just ignoring every bad news.

That may be the sign of a complacent market, but it is also the sign of a market which is very strong in the near term. At another time if the market was not in an uptrend, the political noise I am sure would have dented the market much more, but it has just been shrugged off almost as if it does not exists. That’s a sign of a market which is shrugging off pretty much any kind of bad news. It remains much focused on the trend which is climbing higher with every passing day and on global liquidity.