InvestorQ : What is your stock market outlook for trading on Thursday 25th August 2022?
Chandralekha Desai made post

What is your stock market outlook for trading on Thursday 25th August 2022?

diksha shah answered.
2 months ago

On Wednesday the markets once again gyrated wildly in a big range before eventually allowing the Nifty to close the day 27 points higher. The late rally in the Nifty was largely led by the upstream oil stocks with a robust ONGC helping the Nifty to close in the positive. With Saudi Arabia indicating at OPEC supply cuts, crude prices spiked to above $100/bbl.

In terms of the market structure, the advance decline ratio was almost even at 26:24 for the Nifty. However, there was caution prevalent in the markets ahead of the 3 day Jackson Hole symposium starting on 25th August. The highlight of the symposium would be the statement of Jerome Powell, which would typically come on the last day of the meet.

Foreign investors or FPIs were net buyers in equities to the tune of Rs.23 crore as domestic funds and LIC sold stocks worth Rs.322 crore on Wednesday. The institutional trading action has been limited during the current week after the FPIs infused nearly $5.5 billion into equities in the first 20 days in a sharp turn by investors towards a risk on strategy.

Globally markets were in the positive, although the gains were very measured. The Dow Jones Industrial average closed 60 points higher while NASDAQ closed 50 points higher on Wednesday. Europe was flat to positive, but UK remained under macro pressure. SGX Nifty is up 43 bps in early trades and the F&O expiry is likely to make investors cautious.

While global markets are still tentative ahead of the Jackson Hole symposium starting on Thursday, the immediate data point for India to watch would be the extent of rollovers at the end of Thursday. That would show the confidence traders have in rolling longs in the markets. Low levels of VIX are the one positive which could trigger long rollovers.