STOCKS
Asians are trading in red following the overnight sell-off in the US markets. Some consolidation / correction within the overall uptrend seems likely in the global equities in the coming days. The Sensex and Nifty 50 which were closed on Monday on account of a public holiday may open on a negative note taking cues from the Asian indices.
Dow Jones (25,819.65, -206.67, -0.79%) witnessed a sharp fall on Monday. It has closed decisively below the psychological level of 26,000 and keeps the view intact for a test of 25,750. A break below 25,750 can test 25,600.
DAX (11,592.66, -9.02, -0.08%) is mixed. It has support at 11,500 which can limit the downside in the near term. While above 11,500 the outlook will remain positive for the index to move up to test 11,750 and 11,800 levels going forward.
Nikkei (21,690.06, -131.98, -0.60%) can test the 21,600-21,500 support region in the coming sessions. A bounce thereafter will have the potential to take the index higher towards 22,000.
Shanghai (3,027.30, -0.28, -0.0092%) spiked to 3,090 on Monday and has come-off sharply from there. A test of 3,000 is likely in the near term. A range bound move between 3,000 and 3,100 can be seen for some time.
Sensex (36,063.81, +196.37, +0.55%) and Nifty 50 (10,863.50, 71.00, 0.66%) has a significant support at 35,730 and 10,750. Though a test of these supports cannot be ruled out in the near term, the outlook will turn negative only if the indices break below these supports.
COMMODITIES
Oil continues to consolidate. Gold and Silver has tumbled as against our expectation, breaking below their key supports. Near-term view is negative for them. Copper is on a corrective fall. It can dip further before reversing higher again.
Contrary to our expectation, Gold (1286) and Silver (15.1) has declined breaking below their key support levels of 1300 and 15.55 respectively. While below 1295, gold can test 1280 and 1275 in the coming sessions. Silver on the other hand can fall to 14.85 on a break below 15.
Copper (2.92) broke below 2.93 and fell to test 2.90. A further dip to 2.89-2.88 in the near term cannot be ruled out before the overall uptrend resumes.
Brent (65.55) is holding above its support at 64. The sideways range movement between 64 and 68 remains intact. Within this range, while above 65, a rise to 67 is possible in the near term. WTI (56.4) remains mixed and is continuing to remain range bound between 55 and 58.
FOREX
Overall currencies are mixed. While Dollar has some scope of strengthening in the near term, it may not be sustained in the longer horizon. Need to watch important support and resistance levels in the near term while most of the currencies could be ranged within narrow zones just now.
Dollar-Index (96.68) rose from levels near 95.82 seen last week instead of falling further towards 95. While the index trades higher, it could test 97.0-97.50 on the upside before coming off from there again towards 96-95.75 levels. Only on a break above 97.50, if seen would indicate bullishness towards 98.50 in the medium term.
Euro (1.1336) has come off well from 1.1420 levels but need to continue towards 1.13-1.1250 levels in the near term. Overall an initial fall towards 1.1250 is possible before rising back towards 1.1450.
Euro-Yen (126.81) has important near term resistance at 127.60 on the daily candles and while that holds, a corrective dip towards 126 or lower is possible in the coming sessions. Near term looks bearish below 127.60.
Dollar Yen (111.88) is rising well towards resistance at 112.5 from where a rejection towards 111 is possible in the near term. Immediate region of trade is between 112.50 and 111.00.
Pound (1.3172) has immediate support near 1.3150 which if holds could pull pound higher towards 1.3350 or higher again in the near term. On the other hand, a break below 1.3150 could be medium term bearish with a possible downside target of 1.2950.
Aussie (0.7075) seems to be breaking below immediate support at 0.71 and that could open up chances of testing further lows of 0.695 in the coming sessions. Only an immediate bounce back from current levels could prevent further fall and instead turn it upwards targeting 0.72-0.7250 again.
USDCNY (6.6995) is holding above 6.66 well and looks bullish in the near term towards 6.72 from where a corrective dip looks possible.
Dollar Rupee (70.9150) could trade in the 71.0-70.60 region with a possible extension to 71.25 on the upside. Only a break below 70.60, if seen would open up chances of testing 70.20 on the downside. For now we may expect 70.60 to hold for a few sessions.
INTEREST RATES
The US yields are trading lower. The 2Yr (2.54%), 5Yr (2.53%), 10Yr (2.72%) and 30Yr (3.09%) have fallen from 2.57%, 2.56%, 2.75% and 3.12% respectively. The fall could extend for a few sessions taking the 10Yr towards 2.69% and 30Yr towards 3.06%. The 5Yr could head towards 2.49%. Near term looks bearish for the US yields.
The US-JGB 10Yr (2.72%) has dipped a bit and could re-test support near 2.66% before again trying to rise from there.
The UK-US 10YR (-1.45%) has risen sharply but could soon see a corrective dip from current levels targeting -1.51%.
The 10Yr GOI (7.5558%) has immediate support near 7.52-7.50% from where arise towards 7.70% is possible in the near term. This could indicate that Rupee could possibly trade weaker against the US Dollar in the coming sessions.
