How do you see the Nifty and Sensex trading on the last day of the week on 20 August?

Thursday was a market holiday on account of Muharram and hence the only reference is the SGX Nifty. On Thursday, the SGX Nifty was down over 200 points and that is likely to be reflected in the form of gap down opening on Friday 20 August. However, after that it is likely to be largely range bound. The trigger is the Fed minutes hinting at taper in 2021.

Friday is going to be another busy day for the primary market with 2 IPO listings of Nuvoco Vistas and CarTrade Tech. Both the IPOs have seen a sharp compression in their grey market prices and that is likely to rub off on listing. In fact, the impact was felt across all IPO GMP after the tepid listing of IPOs in the earlier part of this week.

Foreign investors were net sold Rs.595 crore in equities on Wednesday while domestic institutions sold Rs.729 crore ahead of the Fed minutes. On Thursday, while Indian markets were shut, the US markets were largely flat while Europe was down. The SGX Nifty is likely to open with a negative gap down to cover up for the range of Nifty on Thursday in SGX.

The impact of the Fed minutes may not too deep because a strong dollar is likely to benefit a lot of export driven companies like IT, pharma and autos that have a strong export component to their revenue models. In the past, Fed hikes have been negative in the short run but largely positive in the medium to long run of 2 years or more.