How do you see the stock markets on Friday 11th March and do you see the markets bouncing back further from here on?

The last 3 days have been rather bullish times for the stock markets. The stock markets saw more than Rs.10 trillion of wealth created in the last 3 days alone and that came amidst all kinds of news flows. For Friday, being the last trading day of the week, you can expect traders be cautious and wind down on long positions ahead of the weekend.

On Thursday, Nifty gained 250 points and the advance decline ratio or the A/D ratio was robustly positive at 43:7. Meanwhile, the VIX tapered to 25.589 levels, albeit still quite high to justify buy on dips. The sharp fall in oil prices on Wednesday was partially undone on Thursday and markets reconciled to the limited impact that US ban would have on Russia.

FPIs net sold equities worth Rs.1,981 crore while domestic funds and LIC bought stocks worth Rs.946 crore on Thursday. FPIs have now sold over $26 billion in secondary equities since Oct-21. In global markets Dow and NASDAQ were lower while Europe was down 2-3% on Thursday. In early trades, SGX Nifty is around 31 bps lower.

For now, what we know is that the Nifty has shown a bounce in the last 3 days, but may find it hard to sustain on Friday. At the end of the day, these are dead cat bounces due to short covering and hence not something you can venture and buy into. You must first wait for the volatility to subside further before you can attempt bottom fishing in these markets.