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Below is quote on today`s market report by Mr. Santosh Meena, Head of Research, Swastika Investmart Ltd

Indian markets moved in sync with global markets today after a continuous outperformance. Moody's upgrade was already discounted therefore we were outperforming for the last few days despite a sharp surge in crude oil prices and we were also ignoring weak global markets, the higher dollar index, and the rise in US bond yields but finally market took cognizance of these negative developments. Anecdotally, rating upgrades come with a leg and the market tends to react opposite after upgrades come. Nifty ended 153 points higher on 02nd June 2020 after Moody's cut India's rating and today we saw the opposite reaction. The last two day's rally has taken out lots of weak shorts in the system before any meaningful correction and there is a good chance that correction may continue along with global markets. Charts of most of the global indices are showing weakness and Nifty is also forming a bearish head and shoulder formation on the hourly chart and below 17450, Nifty may see major weakness where 17250 will be an intermediate support level. On the upside, the 17750-17800 zone will act as an immediate resistance zone.

Inflation is the biggest risk for the global markets and that may lead to a first meaningful correction in the global equity markets. Though the overall trend of our market is strongly bullish, any meaningful correction will provide buying opportunities but traders should not hurry to buy the dip immediately. It will be important to listen to the RBI governor's commentary on upcoming policy amid worries of inflation.

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