InvestorQ : What is your outlook for the markets on Friday 17th June?
Arusha Ray made post

What is your outlook for the markets on Friday 17th June?

diksha shah answered.
3 weeks ago

It was like a virtual carnage on the US markets on Thursday. While the Dow was down by 742 points, the NASDAQ fell by a full 453 points. Already, the US markets are in bear territory with the general indices down by over 20% and the tech driven NASDAQ down over 35% from the peak levels. Apart from the US markets, even the Japanese markets and the Korean markets are lower in early trades. Yesterday, Europe was also extremely weak.

American bank, Wells Fargo, has called a 50% probability to recession and that set the cate among the pigeons. This was after the Fed hiked rates by 75 bps earlier this week after inflation for May 2022 came in at a 40 year high of 8.6%. In early trades, the SGX Nifty is flat to lower but a lot will depend on how the short cover pans out during the day considering that Friday is the last trading day of the week ahead of a long weekend.

The foreign portfolio investors sold equities to the tune of Rs3,258 crore on Thursday while the domestic institutions bought Rs1,929 crore of equities. The pressure of the FPIs continues unabated despite having sold more than $28 billion of equities since October 2021. With the US having hiked rates by 75 basis points and high likelihood of recession, the investors are showing a clear preference for the safer bet markets.

The exchange rate of the USDINR was slightly weak at Rs78.016/$ in early trades on Friday while the 10-year bond yields were higher at 7.617%. This was on the back of bullishness created by rising US bond yields, a sharp spike in inflation. For the day, the Brent Crude is trading lower at $119.24/bbl and this could be due to demand related concerns.