Fed policy finally comes up. Its as expected except that the tone is hawkish. Hawkish primarily because QE is going to end and balance sheet will be recast. Fed won’t engage in any further bond buying. Its slightly worried about inflation and growth should sustain to bring down inflation. These things are okay for US but not for rest of the world. Asia is mixed and India is undecided. Added to this is the overnight shoot-up of Brent crude and its now at 56.20 dollars, which is almost close to 2017 high. That is going to put a huge pressure on emerging markets and India will be one which will have a major impact.
What happens to NIFTY today?
NIFTY will open flat around 10,140-150 levels and it might encounter a serious resistance at the all time high of 10178 and a strong support at 10,110. Unless there is a big problem or Europe getting into negative there is no way that NIFTY will break this band. So, wait and watch is the only approach. Wait for 10,200 because it’s just round the corner. FIIs are on a sell mode and there were some shorts they built yesterday. Right now the percentage of shorts in NIFTY is at 47% and longs is just 53%. So, NIFTY is stuck badly in this range.
On the options front, 10,200 call is being shorted heavily but 10,000 put is being shorted more. There are 3 puts shorted at 10,000 for every 1 call shorted at 10,200. That makes the 10,050 to 10,240 a band where NIFTY might spend its rest of the time. NIFTY PCR is at 1.57 slightly coming down due to increase in shorts.
Tata Steel and Thyssenkrupp, an European steel maker have entered into a JV by merging. Under this the debt of Tata steel will be shared by ThyssenKrupp and that should be a huge positive for it. I was always bullish on Tata steel and now you will see the stock going up further today.