Today, Indian markets are again opening in red territory in spite of strong global cues. All the global markets are trading in green with gain of more than 5%. Yesterday US market has shown best performance since 1933. Dow Jones surged 11% on Monday on the hope of economic stimulus of $2 trillion package this week.
All the policy makers are framing policies to support their markets. In Europe too, markets have closed in green. This morning Asian markets are showing a promising start too.
Why SGX Nifty Is Showing A Negative Start?
Yesterday at 8 p.m, Indian Prime Minister Narendra Modi has declared 21 days lock down in the country to curb the spread of corona virus . The way cases are increasing in our country is alarming and may prove fatal for the health of the people as well as the economy. In last 10 days, the number of cases are now increasing at a fast pace. See the graph and the sharp surge in the cases. With the lock down situation, the government is trying to flat the virus curve as at present it showing a steep curve. It is trying to break the curve by putting restriction on social meetings among the citizens of the country.
This is good for the society but for the stock market it is putting break on the growth of economic activities for next 21 days. It will have a negative effect on the GDP and also will result in deterioration the financial health of the Indian companies as well the economy as large. That is why markets are negatively reacting to this scenario.
What should be trading strategy for today?
Since today, markets can react negatively. The best thing is to short the market. You have to wait for first five minutes to know the reaction of the market as global cues are positive for the day and short position can hit you sharply.
Short the market only if Nifty breaks 7500 level. Market has respected this level in last few days. Since market are opening near support level. So shorting straight away will prove to be harmful move.