Rise in US bond yields leave global mkts trembling

I don't know what levels one can go down to but we will now move entirely in line with global markets. I don't think the bulls have thrown in the towel in our market. Even yesterday when global markets were a bit weak, we fell and then recovered and it wasn't such a bad closing for the market as we are still within the vicinity of 4,200.

This morning 4,200 is probably a bit away, so you will want to latch on to some of the lower support levels, which exists around 4,100-4,150. That seems to be a zone, which the bulls will try and defend at least for the day. There could be a bit more weakness out here as there is quite a bit of extended positions on the futures market and some of that might come off now

For the moment, I think the markets will try and seek support on a weekly closing above that 4,100 mark and then wait for next week's global cues to come in before they take another move. I am not terribly sure if the market will sell off completely and have a dramatically bad closing for the week, at least pending next week's global action.

On Asian markets:

China is in a different zone. It corrects sharply and then moves up ignoring all global cues. That market is in the green but other markets are not looking very comfortable. The Nikkei is down more than 300 points, Straits Times is down 1.5%, the Hang Seng and Taiwan is down by almost 1%. It's not a good morning across Asia after what's happened in the US and in some other emerging markets.

It's gone sour for the moment for sure. This was not entirely unexpected as this global rally was too amazing and surprising the way it was just continuing on and on. It had to take a bit of dent. If this is a 7-10 day sharp draw down, after which global markets stabilize once again, it may not be such a bad thing because things were getting little overextended there globally. Whatever the growth story, the kind of rallies that we had seen in most markets, without any kind of a pause since February, was getting little out of hand.

On interest rates:

The question is whether this whole interest rate situation becomes a much bigger fear for the market as this might trigger off much deeper fall in emerging markets and global markets. The jury is still out on that. It has just started in the last couple of days and you cannot predict whether its going to be for one week or a deeper correction from which the markets don't bounce back easily to new highs.

On US bond yields:

The US bond yields have crossed the 5% mark yesterday. The line may have been crossed yesterday but its been going up quite consistently. There has not been a two-day jump in bond yields, so it's not that the equity markets just woke up on Monday morning and figured out that bond yields have risen quite a bit. They have just been ignoring it as it has been going up. I think it's been latched on to as an excuse to correct because a correction was any way overdue.