Finally Left parties have decided to withdraw support to UPA Government, yesterday, on Indo-Nuke deal issue, as PM chose to go a head with the negotiations with IAEA and NSG. The letter of withdrawl of support will be handed over to the President today at 12 noon or tomorrow, when PM returns back to India, after attending G-8 summit in Japan. With this the Congress lead UPA government has become minority, and the damage controllers from Congress and its allies are confirming that they have the numbers to pass "confidence vote" on the floor of parliament when ever it is convened. Monsoon session of parliament is likely to begin in August, and according to Pranab Mukherjee Government wants to seek vote of confidence from parliament before proceeding to meet IAEA governors on 28.07.2008. In this case, whether an exclusive session shall be called for this 'trust vote' around 21.07.2008, is the guessing doing the rounds. How the number game is played from here on will send shivers through both the camps.
A clear winner in this shall be NDA, which is looking for encashing on failure of the government due to spiralling of prices, and back seat driving by left parties, hurting the reforms process. Congress achieved its goal, by getting rid of left parties, forcing them to withdraw the support, which they have been boasting during the entire regime, that they will not do, which helps BJP and its allies to regain power at the centre. If congress can muster the required support without left then that is very good news for the economy and equities. FIIs will have re-look at our markets if that happens. The survival of government is more or less assured as no political party is prepared for early election, because there might be 'anti establishment vote' as prices are soaring on all fronts. Infosys results will be announced on friday, but now the performance of stocks, sectors, etc., will take back seat and the political news will be at fore front moving the markets, according to me.
One uncertainity that left will withdraw support has gone which might give some relief rally to our markets today. Crude too cooled by 9$ in the last two days on the strengthening of US $, which has given relief rally in US markets overnight, which ended with good gains. Singapore Nifty futures are currently quoting at 85 premium suggest gap up opening initially, as asian markets are also trading in positive territory. Nifty futures closed at a discount of 62 points, indicating continuation of shorts, which will be covered only on spot nifty closing above 4120 with good volumes. Thus, nifty will oscillate between 3850 to 4150 for some more time, and break out from the range will decide the larger move in the days to come. VIX has closed at 36.04 indicating continuation of volatility.
Strategy for the Day: One can short the Nifty futures at the opening with a stop loss of 25 points from the high at that point of time, for intra day trading.
3 comments:
Dear Sir,
shorting nifty? people expect massive short covering.that may may take us above 4120. only if FII took the market up then only they call sell the stocks at good rate when the want to go out.
but having seen ur earlier accurate calls now iam confused. i may fall from opening highs.
saba
Dear saba,
I expect short covering to give huge gap up opening initially, but later they will come down, as left parties are going to give the lettter of withdrawl today/tomorrow, and they would meet President at 12 noon.
Any time one shorts nifty for intraday trading should necessarily keep minimum 25 points stoploss above the day's high at that point, to protect from unlimited losses.
Hope I made my view and strategy clear to you?
with regards,
bkvrkrao
Dear sir,
you are spot on on this.congrats
saba
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