InvestorQ : How do you see the stock markets panning out on Tuesday 25th October 2022?
Lavanya Subramanian made post

How do you see the stock markets panning out on Tuesday 25th October 2022?

diksha shah answered.
2 months ago

In the brief 75 minutes of trading on the Muhurat Day trading session on 24 October, the Nifty closed with gains of 154.45 points and well above the 17,700 mark. The Nifty is now up nearly 1,000 points in the last couple of weeks from lower levels. The surge was led by stocks across the board, largely banks and FMCG stocks. However, metal stocks struggled.

The breadth of the market as measured by the advance decline ratio or the A/D ratio stood at an impressive level of 47:3 remaining favourable overall. Incidentally, this was the best Muhurat trading performance in the last 14 years since the year 2008. However, despite the 3.9% GDP growth reported by China, metal stocks remained under intense pressure.

Foreign portfolio investors of FPIs were net sellers to the tune of Rs.154 crore even as domestic funds and LIC bought stocks worth Rs.80 crore on Monday during the brief Muhurat trading session. However, being a brief session, the numbers cannot be taken to be too decisive and we have to await more specific cues on flows.

On Monday, the Dow Jones Industrial Average was up 417 points while the NASDAQ was up 93 points as markets built in lower spike in rates in the coming weeks. European markets were up more than 1% on Monday as some stability finally returned to the UK markets, but the SGX Nifty is trading 52 points lower in early trades after the rally.

In terms of outlook for the markets, the Nifty has now rallied close to 1,000 points at extremely short notice from the lower levels and that makes the markets rather shaky. Of course, VIX does remain low around 17.42 levels, but there are concerns that the entire scenario could change drastically if the US Fed starts hiking rate. That remains the X-factor for the Indian markets and traders can adopt a buy on dips strategy, while reducing too much exposure to cyclicals and financials at higher levels.