Wall Street rises as materials and crypto stocks offset continued bond sell-off
Global Markets:
US Dow Jones closed 0.5% higher and European indices closed strongly yesterday. However, European futures are trading in negative territory this morning in Asia session. Global markets are basically consolidating close to the recent swing bottom. Services Purchasing Manager’s Index (PMI) that came out for the US was very low as well. The coronavirus deaths are continuing to claim in the US and UK although the pace of infections is slowing somewhat.
ASIAN Markets this morning:
Asian markets this morning are a mixed bag. Most of the indices are trading with small gain or small loss. Korea’s Kospi was up 1%. Japan’s Nikkei is trading more than 2.5% lower. SGX Nifty is trading flat compared to yesterday Nifty futures close.
SGX Nifty trading flat
Calendar events
India services PMI is due for release today by 10.30 AM. Earlier manufacturing PMI came in at 27.4 that was worse than most of its Asian peers. Services PMI for India is expected to be 40. It remains to be seen if Services PMI will meet the expectation.
India:
The government is trying to shore up evaporating revenues with raise in fuel and liquor taxes. There are also news reports that the government may cut capital expenditure to support and offer stimulus targeted at small and medium enterprises.
Another global rating agency, S&P also warned yesterday that the government does not have any room for large fiscal stimulus. This is another indication that any large slippages in the fiscal deficit will risk a rating downgrade.
Result announcement:
Notably, Yes Bank (NS:YESB) will announce its numbers today.
NIFTY -Technical Bias:
Nifty- Drifting down
Price Action & Pattern:
Nifty dropped yesterday as well even though global markets were consolidating. Today, SGX Nifty and Asian markets indicate a flat opening for Nifty.
Reliance Industries (NS:RELI) has been holding steady for the past two days and has been cushioning Nifty from an even bigger drop. With rights issues around the corner, operators in the RIL counter may not like to see a fall in RIL prices. Therefore, it would continue to offer support to Nifty.
RIL Cushions Nifty's fall
I expect Nifty to open flat and drift downwards.
