How do you see the markets trading on 01st November, especially after the sharp correction in the previous week?

In the previous week, the Nifty closed at 17,671 on Friday and even the Sensex closed below its psychological support of 60,000. The selling literally continued across the board. IT stocks and banks came under a lot of pressure as wealth to the tune of Rs.615,000 crore was fully wiped out in a matter of just 3 trading sessions. Global cues were also not favourable.

The pressure on the market was evident from the negative A/D ratio at 18:32 which showed pressure across majority of the stocks. While the VIX has remained higher during the week, it closed the week below the 18 mark which gives some assurance about the Nifty taking support at lower levels. However, the sentimental undertone remains weak for the markets.

The big bane has been foreign investor selling, especially after the likes of UBS, Nomura and Morgan Stanley downgraded Indian equities from overweight to equal-weight. FPIs were actually net sellers on Friday worth Rs.5,143 crore while DFIs bought stocks worth Rs.4,343 crore. This could also be explained by the spate of IPOs this week.

Global markets have been rather lacklustre, but the IPO boom could cause some lack of interest in secondary markets. Nykaa closes on Monday and PB Fintech opens on Monday with Paytm likely to open next week. FPIs are likely to play a little defensive in the secondary market and look for bigger returns in the primary market.