Headed Lower Again

The post-Fed global market reaction continues. On Friday Wall Street was down 1.6% while Europe was down 1.8%. Asia is also weak across the board this morning. Cuts range between 1-2%. 

Commodity markets, especially crude oil came under pressure, ending down nearly 5%. 10-year yields fell 13-14 bps in France, Italy and Spain. In the US 10-year yields fell  6 bps to 2.13%. 

The dollar benefited from risk aversion. There has been little by way of news to drive markets. Rather, it seems, that the market is acknowledging & reacting to Fed's lack of confidence in the recovery thesis.

Coming to India, given that Asian markets are trading lower by between 1-2%, & the fact that India outperformed on Friday, expect Nifty to start lower and maybe give up some of the gains.