If the GDP data was postponed even by a day, today we would have had a 9950 plus opening and 10,000 being achieved during the day. Two reasons for it. First Asian markets are in green and that would mean a gap up for NIFTY. Second, the start of any new series mostly happens on a positive note. But we have a 5.7% number to deal with. This has come as a shocker and we would see market reacting to it as soon as it opens. We will have a flat opening just above 9900 and will 9900 hold or not needs to be seen. If 9900 does not hold then fall towards 9850 is inevitable. But there is a hope that by mid day traders will digest the numbers and the NIFTY might recover. That will be the best case scenario to close the day at or around 9900. But today we lost the golden opportunity of touching 10,000.
A word on macros, apart from GDP, the PMI for July and core sector for July comes in. Core sector might give a sigh of relief but that would be taken away by the dismal PMI for July that comes at 47 which is the lowest since 2009. This is scary and that would mean IIP numbers coming very bad. If this is the scenario in Q2, how do we attain RBI’s forecast of 7.3% GDP? All we will manage in Q2 is another 5.5 to 5.8% GDP number and that would mean we would grow at 6% in FY’18. That takes away everything we have built in last 3 years. Are we in for a sharp correction to 9000? Dont rule it out. Be cautious!!