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Markets Bullish Stance Intact - HDFC Securities
Despite the 26 point slide in the Nifty on Thursday, the bullish stance of the benchmark is intact. Though the Nifty ventured below Wednesday’s low it remained above the neckline that it had broken on Wednesday.
So the bullish stance of the markets is intact.
Now with the weekly expiry of the index derivatives in the rear view mirror, the markets can dust off their clothes after the overnight 26 point loss and move on.
The U.S. markets had opened sharply lower on worries that China had reported a large surge in the number of deaths and cases, but recovered when the WHO clarified that the spike in coronavirus infections was a cumulative number and not a single day’s figure as China changed its methodology of diagnosing the infection.
The three indices, after the WHO clarification, recouped all their losses and stepped into positive territory. It is then that the U.S Federal Reserve played spoilsport.
The Federal Reserve said it will shrink its repurchase agreement operations from Friday. This made the indices slide again.
Asian markets are mixed this morning with the Nikkei in the red and Hong Seng and Shanghai Composite mildly in the green.
The Rupee is likely to open flat and the Nifty around 25 points higher.
Though the technicals are intact, future movement of the markets will be a function of how the virus spreads further. While the world has little respect for the Chinese data being dished out, it can know for sure from the cases outside China, how fast it will spread and how deadly it is. At this point of time, the markets are not alarmed, but could change in the future.
Though Crude Oil was higher yesterday in regular trade and is up further in the electronic trade this morning, we believe any further rise will get sold into as the reduction in China’s demand of oil by 2 million barrels per day will is much more than the 0.6 million expected to be further cut by OPEC and OPEC plus.
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