Thursday’s last hour tumble took most players by surprise, barring of course those who probably engineered the fall. Some term it a ‘trading strategy’ while reports suggest an Australian institution (Down Under did we say!) initiated short positions in Nifty futures after 2 pm causing a cascading effect.
Some cooling was only to be expected after hitting multi-month highs. Support is likely to come in at around 4400. On the upside, 4720 is the level to keep an eye on. Today, we expect a flat to slightly lower start. Key Asian markets are in the red. US stock benchmarks were nervous to say the least ahead of Friday’s monthly jobs report. The overall bias remains positive from medium- to long-term point of view.
Concerns, however, seem to be escalating on the monsoon deficit and its wider fallout on the economy, especially on food prices. Rumors are the ‘drought’ word could cause some heartburn. Interest rates are also expected to head higher in a few months. On the global front too, the recovery appears to be fragile.
