Confidence goes for a toss when the world comes tumbling down. Despite less leverage, fear may overtake temptation while attempting to pick stocks as the sentiment swings wilder by the day. Interestingly, the Japanese market has escaped the global carnage as it has been shut for 3-4 days. May be it will react when it resumes trading. South Korea’s market is also closed today.
No such luck for India, as the market is all set to witness deeper cuts. All round selling dragged the NSE Nifty below 50day DMA which it had managed to hang on to for over a month. Most technical and derivative indicators are showing further weakness and the Nifty is set to test 5050. The best tactic in such turbulent times is to stay away and wait for stability to return.
US stocks suffered their steepest drop in three months, as risk tolerance collapsed amid mounting concerns over the European debt crisis. The S&P 500 index has dropped to its fourth test of support at the March peak of 1,180. A close below this level would likely signal a near-term downtrend, according to technical analysts.
Spanish stocks led losses on European equities indices as mounting doubts over Greece’s bail-out and fears of contagion to other eurozone periphery countries haunt investors. The dollar benefited from safe haven status while the euro suffered as investors continued their lukewarm reception to the Greek rescue package.
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