Trade war or crude, who will it be?
Sentiment across the globe is sliding as the trade war plot thickens between the two biggest economies of the world. The lingering global trade tensions are on a peak as the July 6 deadline for imposition of the tariffs by the US on Chinese exports approaches.
Before Iranian crude oil imports come to a stop, India is readying for alternatives to ensure crude supplies. Crude prices moving towards $78 per barrel is also pressurizing the crude importing Indian market.
The Q1 corporate earnings season begins the coming week which should also pave the way for the indices.
Meanwhile, with the index hovering around the 10,680 level, it has a major support at 10,600. Only when the index decisively breaks the range 10,600-10,750 further direction can be sought. The next support is seen at 10,530 while the resistance is at 10,750. The index formed a high in the month of May –June 2018 and the resistance is seen at the level of 10,900. Only a close above these levels would signal further strength.
Basic setup remains weak and selling should be seen on rallies. A close below 10,500 levels can drift the index to 10,400 levels.