How do you see the Nifty and Sensex stocks on Monday 22 November?

Let us quickly look at what happened in the previous week in terms of market trends and flows. The Sensex closed the previous week 1.73% lower with autos driving the markets lower on Thursday and IT also correcting. Tata Motors and M&M came under pressure on Thursday, but it was a truncated 4-day week for the stock markets.

We have seen a rather anomalous trend in the markets in the last few days. The indices continued to fall sharply through the week despite the VIX also trending lower to about 14.8 levels. Put writing in Nifty options has shifted lower to the 17,000 levels indicating further downside in markets. However, till VIX is low, we can bet on buy on dips.

FPIs net sold Rs.3,931 crore in equities on Thursday while domestic funds bought Rs.1,886 crore of equities. In Nov-21, FPIs net sold Rs.9,200 crore in secondary equities but infused Rs.23,400 crore into IPOs. US markets were mixed on Friday while Europe came under pressure. The SGX Nifty is up nearly 20 bps in early trades on Monday.

For Monday, two factors would come into play. Firstly, it remains to be seen how Paytm reacts after the very sharp correction on Thursday. It remains to be seen if that impacts FPI sentiments and the schedule of further digital IPOs. Secondly, inflation triggers globally as well as rate hike talks will be closely watched and could have a bearing on markets.