InvestorQ : How do you see trading in the markets panning on Monday, 26ths September? Do you see Nifty and Sensex correcting sharply?
Rutuja Nigam made post

How do you see trading in the markets panning on Monday, 26ths September? Do you see Nifty and Sensex correcting sharply?

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diksha shah answered.
3 months ago
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On Friday the 23rd of September, the Nifty closed with massive losses of 302 points with most of the pressure coming from PSUs and metal counters. However, the good news was that the pharma stocks and the FMCG stocks managed to hold up even in a rather difficult market as buyers preferred to shift to defensives.

The undertone of the market breadth as measured by the advance decline ratio or the A/D ratio at 5:44 remained largely unfavourable. The markets were also jittery in the belief that the markets could correct sharply if the RBI also decided to adopt a rather hawkish stance and that could be necessitated due to the rate differentials.

Let me now turn to the colour of foreign investment action by the FPIs. Foreign investors were net sellers in equities to the tune of Rs.2,900 crore while the domestic funds and LIC bought stocks worth Rs.299 crore on Friday. Overall, for the month of September till Friday, FPIs have been net buyers to the tune of Rs8,300 crore, much lower than in August.

Global market cues have not been too conductive either. On Friday, the Dow was down 486 points and NASDAQ was down 199 points. Now even the Dow index is lower by more than 20% from the peak levels. European markets were sharply down by over 2% on Friday while the SGX Nifty is lower by 154 points on Monday early trades and pressure looks on.

The RBI policy on Friday will continue to be the major overhang on the equity markets but a hawkish view of about 50 bps rate hike looks to be on the cards. The rupee will keep the markers wary of the escalating trade deficit and the current account deficit. For now, it is time to trade cautious and use any bounce to sell into this market. It is likely to remain a sell on rises market for the current week, so use any temporary bounces to sell out.

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