InvestorQ : How do you see the stock market action on Thursday 27th October 2022?
Dia Deshpande made post

How do you see the stock market action on Thursday 27th October 2022?

diksha shah answered.
2 months ago

The Nifty is likely to face tremendous pressure in the truncated week ahead of the Fed meeting outcome and hence the lower levels of 17,500 could once again be tested. The next week sees the all-important Fed meet statement on the night of 02nd November, where a 75 basis points rate hike is now almost looking certain.

On the last trading day of Tuesday, the markets came under pressure in the second half, especially the banks and the FMCG sector. However, select tech stocks gained in the day. Selling pressure is likely to continue in the markets due to the volatility impact of the F&O expiry slated on Thursday. However, VIX is still quite low.

Foreign investors net sold Rs.247 crore in equities while domestic funds and LIC bought Rs873 crore of stocks on Tuesday. FPIs are still selling but the pace of selling is down now. On Wednesday, the Dow was flat and NASDAQ was down 228 points, while Europe has been positive. In early trades on Wednesday, SGX Nifty is trading with gains of 55 points.

In terms of outlook, the immediate challenge is to get through a smooth F&O expiry and then await the Fed outcome next week. It looks like 75 bps rate hike is on the cards, but the language of the Fed would be more important at this juncture. If Fed adopts a toned down language despite hiking rates the focus would shift to the terminal rates. For now, a more subdued tone of the Fed should work positively for the markets.