InvestorQ : Hi Diksha, how do you see the markets for 18 August and do you expect a correction now?
Ria Jain made post

Hi Diksha, how do you see the markets for 18 August and do you expect a correction now?

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diksha shah answered.
4 months ago
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Now the markets looks more like a case of sector rotation. Tuesday saw FMCG stocks in the limelight as stocks like Tata Consumer, HUL and Nestle were holding the markets up. Metals had a weak day, but that is understandable considering the rally they already had. There appears to be a slight shift towards defensives and that is normal at higher levels.

The four listed IPOs are not a great story with 3 of them continuing to disappoint. Only Devyani International, of KFC and Pizza Hut fame, appeared to be doing better with the other 3 falling on the second day. In fact, while Windlas Biotech dipped further into discount over IPO price, Krsnaa Diagnostics actually closed very near to the issue price.

Foreign investors sold Rs.344 crore on 17 Aug while the domestics bought Rs.256 crore of equities on Tuesday, amidst high FPI volumes. On Tuesday, Dow and NASDAQ closed 80-90 bps lower ahead of FOMC minutes, expected to be a tad hawkish. SGX Nifty is flat in early trades, just as European markets were also largely mixed.

Regarding your specific query on whether to expect a correction, there are 2 factors to watch. Firstly, the language of the FOMC on Wednesday night will be very important in terms of FPI sentiments. Secondly, keep an eye on the VIX and if that scampers higher then there could be possibility of a correction. As of now it looks more range bound.

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