What is your stock market view for Thursday 20th January after two sharp days of correctio in the markets?

On Wednesday, Nifty cracked by another 175 points to close at 17,938 levels and this sustained fall was on the back of the dual risks of high oil prices a spike in bond yields. These are indicative of more rate hikes likely in 2022. Nifty has lost over 370 points in just 2 days and the Sensex close to 1,000 points in the same period.

Nifty recorded an advance decline ratio of 15:35 on Wednesday that was largely biased in favour of declines. The VIX or the volatility index also trended marginally higher to 17.78 levels, although there was nothing worrisome about it. ONGC, Tata Motors, Maruti were the big gainers while Infosys came under pressure on Wednesday.

Foreign investors net sold Rs.2,705 crore of equities while the domestic funds and LIC sold Rs.195 crore on Wednesday. Crude and bond yields continue to be the fear factors. In global cues, Dow closed 340 point lower and the NASDAQ ended with 167 points losses. Markets across Europe and Asia saw some bounce but SGX Nifty is under pressure in early trades.

The pressure is likely to broadly continue because of the twin pressures of crude and rates. However, crude is expected to gradually taper as most large oil suppliers are planning a supply thrust. The markets could most likely take some support around the current levels and then gradually move higher. We have to wait and see.