Can lingering concerns about rising Coronavirus cases & fear of fresh lockdown imposition put full stop to bull express?
Even though the markets ended in green on Monday, volatility was the hallmark of the session as India VIX rose by 3.25 to 19.40. Further, multiple indecisive candle formations on the daily chart signalled that the dominant bulls are witnessing a slowdown in their pace of ascending.
It seems that the bears may take over the charge from the bulls on Tuesday morning as SGX Nifty indicates a weak start on D-Street. SGX Nifty is down by 60 points and trading around 13,531 levels. Blame it on the fragile global cues as lingering concerns about surging virus cases and fear of fresh restrictions to be imposed in the US & UK is dashing hopes for speedy economic recovery. However, the bulls on D-Street, after an initial knee jerk reaction, could witness a recovery as they are backed by ample liquidity from the FIIs and continued their buying spree and it’s most probably, they will use this dip to buy.
India CPI inflation data was released on Monday after the market hours, in which, CPI showed signs of easing as it dipped to 6.93 per cent in November compared to 7.61 in October.
The Asian markets were trading in the red on Tuesday amid uninspiring overnight cues from Wall Street as Dow nearly fell almost 475 points from the day’s high and closed near the lows of the day as lingering concerns about the rise in viral infections and fear of imposition of fresh lockdown measures sent a shiver down the spine of the market participants. Hong Kong’s Hang Seng and China’s Shanghai Composite were the worst-impacted as both the indices were down nearly half a per cent. Japan’s Nikkei 225 slipped 0.31 per cent as the Japanese Prime Minister said ‘Go-To Travel' campaign would be suspended nationwide around the New Year to combat mounting cases of Coronavirus.
In overnight development, the stocks at Wall Street fell off from early session highs and eventually, closed mixed for the third straight day in a row. The early optimism on Wall Street was driven by the COVID-19 vaccine as USFDA approved emergency use of the COVID-19 vaccine; however, early optimism faded as the New York Mayor had warned the city to prepare for the possibility of a “total lockdown” amid soaring cases of Coronavirus. In the end, the tech-heavy Nasdaq advanced 0.5 per cent to 12,440 levels, while Dow and S&P 500 slipped 0.6 per cent and 0.4 per cent, respectively. Meanwhile, the majority of the European indices ended in green as hopes rose for a Brexit trade deal.