Negative global cues will see Nifty open flat: Udayan

The disappointment continued yesterday for the market as it surrendered its gains to close below 5,300. Overnight, global cues remained negative which signals that we might be in for a flat trading session and maybe continue to grind in this range, says CNBC-TV18’s managing editor Udayan Mukherjee.

The policy has come and gone, but we don’t seem to have broken out of that range and we are getting trapped into some boring sessions of trade.
At the start of 2012, global markets were showing no signs of heading towards consolidation but now they seem to have lost that zing. 
Global cues are the biggest news piece for our market now, says Mukherjee. Some of this hesitation we are witnessing in global markets could be because of the risk-on risk-off movement which has been fairly volatile.
But it is pointless to look at these cues right now because one day we hear that the eurozone crisis is getting bad to worse only to be told the next day that the Spanish bond auction went well and Spanish bond yields have fallen. There is no particular newsflow to look forward to globally, until June.
In May, which has been a critical and volatile month in the past is where we once again will start focusing on flows in global markets, which is assuming more and more importance in determining what’s the next big positional trade out here. Mukherjee says we need to discover that if the Nifty has to power back to 5600-5700 and beyond.
The RBI’s credit policy came, conquered and went but as was expected, the needle did not change too much for the market. “We had a surprising 50 basis point cut from the RBI, bond yields have cooled off quite a bit, crude is down to USD 118 per bbl from USD 125 per bbl just a few days back but the Nifty is still at 5,300,” he says.
While investors are taking heart from the fact that the market has been resilient at 5,200, it has actually not broken down on several bits of bad news which have been floating in the environment which shows resilience and reluctance to go down and it is becoming quite sticky on the way down.
The market seems to move down almost reluctantly but on the way up too it’s not responding to good news the way it could have in an otherwise benign liquidity environment. So a disappointing outcome that post the rate cut we have not been able to move higher and we are still stuck in the middle of a trading range but that’s the way it is, there is no great momentum in the market that one can see.