Markets and News
The second half of the week starts after a holiday right in-between the week and what a first half it was. Turkish Lira was the villain of the week and it took the whole world by storm sending every currency other than dollar on a tail-spin. The equity markets also reacted very badly and the trend continues today too. Dow Jones closed in red lost more than 130 points and Asia opened in deep red today with Hong Kong down more than 400 points at the open and just in 90 minutes after open it has seen a dramatic recovery and it is in green now. So, we really cant say whether markets will be in red or green today. Almost all of Asia is now flat after that dramatic recovery in last 90 minutes.
On the domestics, Rupee was the news of the day on Tuesday as it slid past 70 per dollar but as many would put it, and looks like in the near term the Rupee is expected to decline further and we might see a 71 on the rupee very soon probably by early next week or in this month. Rupee however recovered later in the day on Tuesday but the trade deficit numbers that came in does not paint a good picture. The good news however is coming from the Brent Crude front where the Crude slipped to 71.2 dollars now and we are now seeing a 71 dollar brent and a dollar at 70 rupees.
Talking about the trade deficit numbers that came on Tuesday evening, showed that trade deficit is at a 62 month high, the highest since Modi govt took over, came at 18 billion dollars for July compared to 16.6 billion in June. Exports contracted to 25.77 billion dollars from 27.70 billion dollars and that is the big worry. Imports also fell to 43.8 billion from 44.3 billion in June. Oil imports are at 12.3 billion while Gold stood close to 3 billion dollars. This is really not a great news for the Rupee and the fiscal deficit is already at 3% of the GDP now. How markets take this, needs to be seen.
On the derivatives front, Friday saw the premium on Nifty futures surging to 28 points on the back of green Nifty. However there is some caution wih FIIs reducing their long positions in futures to 54% from 55%. Options market also has seen some demand for puts, especially long puts and the Nifty put call ratio surged to 1.70 from 1.66. 11400 put continues to be active with 7.2 lakh positions created followed by 11500 put that added 3.4 lakh positions and 11300 put has 3.2 lakh positions. On the call side 11600 call added 3 lakh positions and 11700 call added 2.6 lakh positions and 11800 call added 1.3 lakh positions.
What is the Nifty call for the day?
A volatile Asia means we could open maybe bit gap down at 11400 levels and what happens from there needs to be seen. 11320 is the ultimate support that can come for any fall and 11420-11450 is a strong resistance. I would advice you to go short at the beginning for any value between 11380-11410 levels with 11330-11350 as the possible target. But if Nifty goes to 11420 quickly and doesnt fall, wait for 11420 to be broken before going short. These positions are not just intra-day and depending on situations can be carried forward to tomorrow also.