InvestorQ : How do you see the trading approach for Monday, 25th October? Will the Nifty and Sensex bounce back or you see more correction?
ishika Banerjee made post

How do you see the trading approach for Monday, 25th October? Will the Nifty and Sensex bounce back or you see more correction?

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diksha shah answered.
2 months ago
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Interestingly, on Friday the Nifty was down for the fourth day and nearly 80% of the week marked the fourth consecutive day of losses on the Nifty although it took support at the 18,000 levels and closed above 18,100. The results during the week will hold the key to the market movement and that includes big names like Kotak, Bajaj Auto and Bajaj Finance.

While global inflation and US hawkishness is a worry, the real worry for the markets is the rising input costs putting pressure on corporate bottom lines. That is evident in the results of consumer goods companies and could soon spread to other sectors too. Consumer goods companies like HUL, Asian Paints, Nestle etc could just be the tip of the iceberg.

FPIs were net sellers of Rs.2,698 crore in equities on Friday while domestic funds bought stocks worth Rs.1,030 crore. FPIs have been net sellers in October till date. On Friday, Dow closed 21 bps higher while NASDAQ was 82 bps in the red. European markets were in the green but the SGX Nifty is absolutely flat in early trades on Monday.

For now, it looks like the Nifty may not really correct below 18,000 although any sharp rally from here does not look too likely. The worry is that the spike in input costs could hit a lot of mid cap stocks that are more vulnerable to such macro shocks. The safe bets will be the likes of IT, which is less vulnerable at this point of time.

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