How do you see the stock market outlook for Wednesday 04th May 2022?

It is indeed interesting that in the last four days, the Indian markets have only traded for one day. So, there is going to be a lot of pent up trading sentiments on Wednesday morning as markets come back after a break. The day will be dominated by 2 big events, viz. opening of the LIC IPO in the morning and the Fed meet outcome late on Wednesday.

On Monday, the breadth of the Nifty turned out to be negative at 18:31 and it was only the late bounce on Monday that saved an otherwise weak day and reduced the extent of the fall. The fear index or the VIX spiked to 20.28 levels. With bumper results in Q4, Tata Steel could be in the stock to watch. The split and dividends will add to the attractiveness.

Foreign investors were net sellers in equities on Monday to the tune of Rs.1,853 crore while the local funds and LIC bought stocks worth Rs.1,951 crore on Monday. Out of the Rs.5,200 crore raised by the LIC from the anchors, the mutual funds accounted for 71% of the fund raising. That is going to tie up a lot of local liquidity till the allocations for the time being.

Turning to world markets, while Indian markets were shut on Tuesday, the Dow gained 67 points and the NASDAQ gained 22 points ahead of the crucial Fed meet outcome. European markets were up by nearly 70 bps while the SGX Nifty is 55 bps higher in early trades on Wednesday. Indian markets would predicate on the enthusiasm for the LIC IPO.

Needless to say, all eyes on 04th May will be on 2 key events. The LIC IPO opens and the anchor portion has been well received. Secondly, the Fed meeting outcome will be known late on Wednesday night and that would give hold the key to the future course of action by the Fed. Be cautious on rate sensitives, but RBI response would be more crucial.