What is your overall view on the stock market on Nifty and Sensex and the global markets for 29 October? Do you see the correction continuing?

The short respite of Tuesday did not really last too long and the Nifty corrected over 160 points on Wednesday getting back to below the Monday levels. Across the board, there was heavy selling in Banks, especially the HDFC twins and ICICI Bank and even IndusInd.

There are apparently some concerns over the results announcement of select financials like HDFC and ICICI Bank. Axis Bank results were relatively encouraging although markets are worried that the full impact of the lockdown may not be in the books still.

Surprisingly, FPIs turned sellers on Wednesday selling close to Rs.1131 crore while DFIs bought Rs.2 crore on Wednesday. The FII negation appears to be temporary and a negation of the October trend. However, we could see ETF exiting EMs if pandemic worries return.

Global markets corrected sharply, led by the US markets with the NASDAQ and the Dow correcting over 3.6% on Wednesday. Even key European markets like the CAC, DAX and FTSE lost between 3-4%. SGX Nifty is trading close to 90 bps lower in early trades, but subsequent levels could be decided by Asia and the Dow Futures later in the day.

I am not making any specific changes to open positions. However, you may wait out for today and take fresh positions only in the next week. Most likely, the sell-off is temporary as MSCI and the FTSE Index Management have upgraded India’s weight and that should trigger more flows into Indian markets.