5DSMA is being held as bulls fight back to break the range! Settlement & Inflation shall bring in higher volatility today!

Uncertainity over bail out package from US Government to help the current financial crisis, brought nervousness in US markets, which have become directionless. The economic data on housing, consumption, etc., are indicating clear indication of recession setting in US, making dollar weakening against other currencies, should be actually good news for emerging economies like India, which should receive good dollar flows. Contrary to this expectation, Indian rupee is also weakening inspite of strong fundamentals, as RBI and Govt pursuing weak rupee policy to encourage exports and exporters and discourage imports, since our oil import bill is quite large and cannot be funded by 'hot money'. This observation is strengthened by the fact that when dollar is weak against Euro, rupee should strengthen, but rupee : dollar exchange is moving independent of this cross currency exchange movement. Our indices especially, Nifty tried to climb 4214 level yesterday, a head of expiry today, but selling did not allow to close above 4200 level. VIX has closed at 35.61. 5DSMA is currently placed at 4158.92 and 20DSMA stands at 4266.97 could be the boundaries for today.

Singapore Nifty futures are currently quoting at a discount of 30 points indicate weak opening as asian markets are also trading in negative territory. Inflation might look up marginally when the data is released at 5.30 p.m. after closure of market hours. Trading on NSE is having halt and extended hours since 24.09.2008 due to sun outage and shall continue till 08.10.2008. The trading ends at 04.15 p.m. all these days. This also brings in some additional volatility to our markets, as observed in the past too. The range of Nifty could be 4100 to 4300 today.