Blockbuster stimulus unlikely, & Nifty may retest 8,800 level


The Indian markets are waiting for a second round of economic stimulus package to be declared by the government. Limited by the constraints of finances,the government may not be able to declare an extravagant package,as expected by the stock markets. Even in the best of circumstances,it is unlikely to assume that this could cure the downturns in stock prices. Naturally, investors will be picky with their investments.

India VIX ,which currently stands at 39-40 levels, is considerably lower from the high point of 83. The nifty 50 formed chart projects potentially a bearish candlestick pattern. It faced strong resistance at 9,350 level throughout the week. The recent really from the low of 7,500 has uncovered evident bearish indication. A break below the 9,100 level will confirm a rising wedge breakdown and the index may retest the 8,800 level on the downside.

The pandemic has affected markets across the globe and not just India. International responses shall also be kept in mind to determine the future course during the uncertainty. The odds of a further fall in prices is higher than a sustained uptick in prices.

Meanwhile, the over production of crude oil when demand is substantially low, adds onto the crisis. Unless there are signs of economies moving back to normal, crude oil is likely to trade lower.

The Facebook-Jio agreement is expected to bring fortunes for the Indian unorganized sector,by unifying them together under a single platform. Purchasing a 9.99% stake in Jio, one of the major telecom powers of India will severely affect the other stakeholders of the sector.

It is obvious that the Government declared stimulus package would be limited and bounded. Meanwhile, Considering the fragility of the exchanges at the present, the hope for immediate recovery is less.

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