Is Nifty next casualty of border tension?

This is the excerpts from my morning market view that is posted early in the morning in my blog. This is not a prediction or trading tip. This is an analysis of premarket macro narrative.

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Positives:

  • European and US markets continue to move up with large gains
  • DIIs continued to defend the markets

Negatives:

  • India China border conflict- uneasy calm serious escalation
  • Indian markets are getting more volatile
  • FIIs sold again yesterday

Global Markets: Sharp up move

Both US and European markets continued to move sharply higher again yesterday. This shows that markets have reconciled with virus pandemic is new normal that markets and economies need to live with. Risk assets such as Emerging market currencies, high yield bonds, and MSCI Emerging Asia ETF traded in US rose yesterday. The Dollar index and gold consolidated. Copper continued to trend lower from recent swing highs.

ASIAN Markets this morning: - Mixed and sideways

Asian markets are mixed this morning and most of the markets are trading sideways. SGX nifty is trading about 50 points below Nifty’s yesterday close.

Calendar events

There is no significant calendar event planned for today.

India : Border tensions

This time bullish mood on global markets did not carry Nifty higher very far. The escalation in the border tension is causing volatility. FIIs continued to sell yesterday also while DIIs offered support at lower levels and brought the Nifty back up. India seems to be facing several problems including economic, pandemic and border tension. However, the bullish global mood is holding up Nifty so far.

Will Nifty be the next casualty of the border tension?

Right now, the dominant market narrative for India is border tension. Indian army’s willingness to immediately publish higher death toll and subsequent communication shows that Army is ready to take on higher toll and stay aggressive. However, things have cooled down at the moment. Also, two or more days of continues conflict is a low probability event.

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EOD update:

So do you think that the Army should have rather suppressed the death of the soldiers? :thinking:

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Armed forces have right to keep things secret for various reasons… especially in a battle field. I dont think what army shd or shd not do. What i mentioned was part of the analysis