InvestorQ : What is your stock market view for Wednesday 21st of September and will the Fed meet hit market sentiments today?
Niti Shenoi made post

What is your stock market view for Wednesday 21st of September and will the Fed meet hit market sentiments today?

Answer
image
diksha shah answered.
2 weeks ago
Follow

Tuesday was another strong day for the markets with the Nifty gaining another 194 points on the back of a mix of short covering and selective buying. However, markets are still uncertain ahead of the Fed meeting outcome which is expected to be announced late on Wednesday. A hike of 75 bps or even higher rate hike appears to be possible.

The sharp stock market rally on Tuesday was dominated by the healthcare stocks (including the defensive pharma stocks) and followed by the auto stocks. For the day, advance decline ratio was still favourable at 42:8. With the Adani cement consolidation, it was the cement stocks like Grasim and Shree that ended up under pressure on pricing concerns.

Foreign portfolio investors or FPIs were net buyers in equities to the tune of Rs.1,196 crore while the domestic funds and LIC bought stocks worth Rs.132 crore on Tuesday. As of now, FPIs remain net buyers in September, although momentum is much lower than in August. However, the momentum could change rapidly based on the Fed meet outcome.

In terms of market performance on Tuesday, global markets remained under pressure ahead of the Fed meet. On Tuesday, the Dow was down 313 points and the NASDAQ was down 110 points even as the markets were wary ahead of FOMC meet. Europe markets took cuts of more than 1% even as the SGX Nifty is 81 points lower in early trades.

In terms of outlook, the markets are likely to face some pressure at higher levels today and it is likely to remain a sell on dips market ahead of the FOMC outcome. The outcome will be known only late on Wednesday, India time. While the 75 bps rate appears to be factored in, and even Fedwatch is hinting at something like that, the real challenge will be if the Fed goes to 100 bps or if the language of the Fed is too hawkish. Trade cautious.

6 Views