InvestorQ : What is your stock market view for the 20th of September and how much can the markets bounce further from here?
Arusha Ray made post

What is your stock market view for the 20th of September and how much can the markets bounce further from here?

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diksha shah answered.
2 weeks ago
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After the sharp correction on Friday, the markets bounced back sharply on Monday. The bounce of 91points happened on a mix of short covering and selective buying. However, markets overall remained sceptical due to the upcoming Fed meeting on Wednesday. Markets have already factored in a rate hike of 75 basis points already.

In terms of sectoral trends, the story on Monday was more about specific stocks. However, Autos, financials and insurance stocks were among the gainers, although the trend on Monday was a lot more stock specific. There was weakness that was visible in most of the metal stocks on China related slowdown concerns.

Foreign portfolio investors were net buyers in equities to the tune of Rs.312 crore on Monday even as the domestic funds and LIC sold stocks worth Rs.95 crore. However, if one were to look at the gross FPI volumes, it did remain quite high hinting at participation in block deal window. That is where most of the action is happening right now.

In terms of global stock market performance, there is caution ahead of the Fed meet. On Monday, Dow was up 197 points and the NASDAQ was up 87 points as markets reconciled to a rate hike on Wednesday. While the Europe markets were flat to negative on broader GDP growth concerns, the SGX Nifty is up 130 points in early trades on Tuesday.

SO, what is the outlook? The big event remains the Fed meet outcome which is expected late on Wednesday. The markets have already factored in a 75 bps cut and unless it is more than that or the language is too hawkish, downside risks would be limited. However, for taking on any specific positions, it is better to wait for the Fed announcement and digest its implications first.

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