InvestorQ : What is your view on stock markets for Thursday 29th September 2022? Do you see a bounce in the markets from lower levels?
Mitali Bhutta made post

What is your view on stock markets for Thursday 29th September 2022? Do you see a bounce in the markets from lower levels?

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diksha shah answered.
2 months ago
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The selling pressure continued on Wednesday as the Nifty lost 149 points and closed decisively below the 17,000 levels. At 16,858, it is likely that short term risks are factored in, but we have to wait and see. However, a lot could depend on the RBI policy looming up with the prospects of a 50 bps rate hike and a hawkish outlook.

On Wednesday, the selling gathered momentum in the latter half of the day as metals and banks came under a lot of selling pressure. The breadth of the market as indicated by the advance decline ratio or the A/D ratio was negative at 15:35. However, defensive sectors like pharma and to some extent auto stocks were among the gainers on the day.

Foreign portfolio investors were net sellers in equities at a level of Rs.2,773 crore on Wednesday even as domestic funds and LIC bought stocks worth Rs.2,554 crore as an attempt to support the markets from falling vertically. For September till date, FPIs are now net sellers to the tune of Rs1,654 crore, a worsening after the enthusiasm of August.

Global markets showed a rare bounce on Wednesday with the Dow bouncing by 549 points and NASDAQ up by 222 points in an amazing recovery. Europe markets were also marginally positive while the SGX Nifty is up around 165 points in early trades. After consistent selling, some short covering is likely, although it may be hard to sustain, in the absence of buying.

The good news is we could see recovery on Thursday. The bad news is, it may not sustain for too long. After sustained selling for the last one week, traders can expect some respite after with the Nifty correcting more than 1,000 points. However, any short covering in the markets would be met with pressure at higher levels, so this bounce may not be too convincing. Traders should ideally wait for cues from the RBI policy on Friday.

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