Trekking through the markets
Recession fears spook financials, RBI measures failed to cheer
The fear of deeper recession in absence of any immediate cash stimulus spooked Indian markets. RBI’s intervention by extending the moratorium on debt payments and rate cuts failed to cheer the markets and outlook becomes increasingly negative. Financials led the market down against the global trend. FPIs continued to press sell button hard, while domestic buying slowed down. Volatility was bit lower. INR weakened marginally, while benchmark bond yields fell below 6% after RBI action.
The market momentum eased further. The level of activity was above average. IT and Pharma were top performing sectors, while private banks were the worst performers.
Global markets rally on vaccine hopes
The risk assets in the global markets rallied as various institutions disclosed positive results for development of vaccine and prompt test kits for COVID-19. The new POYUS threat to China however dampened the spirit somewhat. Equities, oil, sliver, copper, rallied, while bonds, USD weakned. Volatility eased considerably.
Outlook for the week
The outlook and trend for Nifty is unchanged from the last week. The only change is that the momentum has further slowed down, reducing the probability of any dramatic change in the market trend and outlook.
· The day traders may avoid trading in 8974-9277 Nifty range on closing basis. Below 8974, the traders may adopt sell first strategy.
· The long Nifty position must be held with a strict stop loss of 8874 on closing basis. For short positions, stop loss would be 9277. For Bank nifty, stop losses would be 16886 and 18118 respectively.
Other relevant readings
Market trend and outlook
Indian markets last week
Global markets last week