How do you see the stock markets for 19th October? Will the China slowdown have an impact on Indian markets?

It is interesting how so much changes in the market in a short span of time. Just a week back, we though that 18,000 would be the resistance for the Nifty and now it has turned to being the support level for Nifty. The markets on Monday were driven y technology stocks and the metals stocks, which rallied the Nifty higher.

On Monday, the quarterly results of Ultratech disappointed on a sequential basis as profits were down 23% over June quarter. That was more due to input cost pressures due to the 20% spike in energy costs in line with coking coal prices. For Tuesday, the action shifts to FMCG with HUL and Nestle results expected on Tuesday.

FIIs were net buyers on Monday to the tune of Rs.512 crore in equities while the domestic funds sold stocks worth Rs.1,704 crore. Domestic fund selling has been consistent in last few days. US markets were mixed on Monday but Europe was down on fears that the Bank of England could hike rates. SGX Nifty is trading 25 bps higher in early trades on Tuesday.

Regarding your question on China slowdown, the September quarter GDP has been much slower than expected. Metal stocks are likely to take a hit as any hard landing for China is not good news for India. Also there is the real risk of China devaluing its currency in a big way to prevent a hard landing and that can bad news for the INR. VIX is sharply up.