How do you see markets on Wednesday 12th January 2022? How will the Fed testimony impact the sentiments in Indian markets?
Answer
Answer
On Tuesday, the markets closed higher despite hawkish signals from the chief economist of Gold Sachs. The Nifty closed higher by 53 points on Tuesday even as the advance decline ratio was also in the positive at 25:24, albeit marginally only. Market cap of the BSE crossed the previous high and scaled the Rs.275 trillion mark to an all-time high.
Despite the recent 8% rally in the Nifty and the Sensex, the overall VIX has been almost flat at around the 17.76 levels. Among the major gainers were HCL Tech, Adani Ports, HDFC and Tech Mahindra on the NSE. Stocks in the steel segment like JSW Steel and Tata Steel came under pressure on Tuesday after Jefferies called the end of the steel rally in India.
Foreign investors bought equities worth Rs.112 crore while domestic funds bought stocks worth Rs.379 crore on 11th January. Tuesday. In global market cues, the Dow closed 183 points higher while NASDAQ closed 211 points higher; both buoyed by Powell testimony. European markets were up 100 bps but SGX Nifty scaled nearly 110 bps in early trades.
The Fed testimony is pencilling in nearly 4 rate hikes and also warning of a likely shrinking of the base balance sheet from the $9 trillion level by the end of the year. However, the Fed’s commitment to rein in inflation is likely to be seen as a positive.