InvestorQ : What is your stock market view for Wednesday 14th September, after the Dow and the NASDAQ crashed on Tuesday night?
Arusha Ray made post

What is your stock market view for Wednesday 14th September, after the Dow and the NASDAQ crashed on Tuesday night?

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diksha shah answered.
3 weeks ago
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Yes, the US markets will be an overhang, but let us first look at how the markets fared on Tuesday in India. The Nifty closed 134 points higher at 18,070 and the rally was largely led by specific stocks in the financials and the consumer space. The rally in Bajaj Finserv was triggered by the buying interest in the stock after it went ex-split and bonus on Tuesday.

The breadth of the market as indicated by the advance / decline ratio or the A/D ratio of Nifty was positive at 34:15 and the markets did not react to the domestic inflation and IIP numbers. The markets will await the WPI inflation numbers on Wednesday, but the dominating theme will be the US inflation indicating at another 75 bps rate hike.

Foreign portfolio investors or FPIs were net buyers in equities to the tune of Rs.1,957 crore even as the domestic funds and LIC sold stocks worth Rs.1,268 crore on Tuesday. For the fourth day in succession, FPIs have been aggressive buyers in the block deal market and September now promises to be another month of strong FPI net inflows.

On Tuesday, Dow tumbled 1,267 points and NASDAQ fell 633 points after US inflation at 8.3% almost made 75 bps hike a certainty when the FOMC meets next on 20-21 September. Europe fell more than 1% while SGX Nifty opened with a huge gap. However, the bounce from lower levels indicates that, there is still resilience. Now for the outlook.

Wednesday is opening with a sharp fall in the markets in early trades due to the sharp correction in the US markets after the US inflation came in higher than anticipated at 8.3%. This makes another 75 bps rate hike by the Fed as good as inevitable when it meets next week. However, this is largely factored in and would be a temporary impact. Investors must use lower levels to pick and choose quality stocks as the micros are still the same.

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