5490 is a key level for the Nifty today: Ashwani Gujral

Ashwani Gujral, Chief Market Strategist, ashwanigujral.com in an interview with ET Now talks about his market outlook.

The big story today is not equities but it is commodities.

Now both these asset classes are likely to fall together. The inflation scare that came in, everybody starts increasing rates, China, India. I do not think commodities could have sustained at those levels but the important point is that yes, commodities failed yesterday, that does not mean equity should start rallying today itself.

The higher rates are still to play out. So there will be more downside in the equity markets and both these asset classes will fall together for sometime before a sustainable bottom is created. This fall in commodities may help us do that pullback rally that we have been hoping for but there is still more downside in both these asset classes. For the day, 5490 is a key level for the Nifty, we need to get past that to have any kind of sustainable pullback.

On the upside, 5538 and then 5580 which was day before yesterday’s high. That becomes key resistance. It is possible that we have a 100-point pullback from here. Bank Nifty 10798 is a key pivot. Above that, we should become positive for the day. CNX IT that key pivot is 6524.