What is your view for the markets on Wednesday, 06th April 2022? With global cues weak, will Nifty drift lower?

Nifty closed with losses of 96 points on Tuesday as the big story of HDFC merger sort of lost its flavour. In a way, the euphoria of the HDFC merger deal fizzled out in the markets, with both the HDFC twin stocks among the top losers on Tuesday amidst doubts over the RBI reaction to its insurance business stake. US hawkishness also played a big part.

In terms of structural details of the market, the breadth of Nifty was flat with advance decline ratio perched at 25:24. VIX, however, showed a pick-up to the 18.49 levels on Tuesday. The major positive plays in the market were the infrastructure stocks like Adani Ports, ONGC, NTPC and Power Grid. Financials corrected sharply on Tuesday.

The FPI selling seems to have abated after the flurry of selling in FY22 and that is the good news as FPIs bought equities worth Rs.375 crore and domestic funds sold Rs.105 crore. In global market performance, Dow was down 281 points while NASDAQ was down 328 points amidst hawkishness in US. Europe was negative but SGX Nifty is down 82 bps in early trades.

There are negatives and positives for the market on Wednesday. On the negative side, the language of the US Fed has been hawkish on rates and also very strong on bond portfolio unwinding. However, on the positive side, the oil prices have slid closer to $100/bbl amidst a stronger dollar and rising oil inventories in the US. That is a macro positive for India.