Plenty of fundamentals today. First it’s North Korea testing a Hydrogen bomb. That sent shock waves across the World. Big negative to start with but 24 hours later its impact has mellowed down a bit. But Asian markets are in red and it all depends now on how Europe will react. US is closed today for labour day and so we wont get any cues from US markets. Second, Trump tweet. He tweeted saying US will reconsider its business with any country that supports North Korea. That is a clear message to China. So its another negative impact news and we need to see how it turns out.
Now for the positives. The biggest of them is a Supreme Court verdict that Bankruptcy code supersedes all the other laws promulgated by state govts or any laws from state governments. That is a huge positive for banks and banking sector will give a big thumps up and Bank Nifty will lead the rally today. Second, the auto sales have come very good especially from Maruti and TVS and these companies will propel the forward march of NIFTY. Added to this is the positivity generated by cabinet reshuffle and elevation of Piyush Goyal to Railways. Everyone might be talking about Nirmala Sitaraman becoming defence minister but for me is Piyush Goyal taking over Railways and owning up the big challenge of putting railways back on track.
With so many fundamentals it’s very hard to predict which direction it will go. For starters, NIFTY will open around 9950 and will try to take support around 9930 and would want to go up. 9980 is a resistance and if NIFTY can negotiate it well, we can see it going up. There is a 20% chance of NIFTY touching 10,000. But if Europe is negative and if anything further happens in Korea we could see a big sell off. NIFTY might break 9900 and go below that. So, conclusively nothing can be said. Best way is to look at Auto and bank stocks and see how we can trade them. NIFTY is rolled in uncertainty.