What is your view on the Nifty and Sensex for Friday trading on 23rd September 2022? Do you see a bounce back in markets after 2 days of correction?

It has been two tough days for the market, although the markets have not fallen too sharply, losing just about 180 points in 2 days. On Thursday, Nifty closed 89 points lower with most of the pressure coming from financials. Consumer stocks in the FMCG stocks remained buoyant as they are normally the companies to gain from higher inflation.

In terms of market internals, the advance decline ratio at 22:28 remained unfavourable. Despite the risks for rate sensitive stocks, auto stocks continued to do well, more as a consumer product. However, today being a Friday and the last trading day of the week, there could be some extra pressure on the markets. Trade cautiously.

Foreign portfolio investors or FPIs were net sellers in equities to the tune of Rs.2,510 crore as domestic funds and LIC purchased stocks worth Rs.263 crore on Thursday. FPI sentiments appear to have been soured by the sharp hike in rates by the Fed but the bigger reason for the FPI selling could have been the rupee fall, and a lot depends on RBI intervention.

In terms of global markets, pressure continued and that could rub off on the Indian markets too. On Thursday, the Dow was down 107 points and the NASDAQ was down 143 points as the tech stocks once again took a sharp hit. European markets were sharply down by 1.5% to 2% on Thursday after the UK hiked rates and SGX Nifty is 70 points lower in early trades.

In terms of market outlook, the real parameter to watch would be the USDINR, which had weakened sharply to the 80.70/$ mark on Thursday. Whether it has decisively broken the psychological mark would largely depend on the RBI intervention. Yesterday, there was a lot of oil marketing companies rushing for importer cover. RBI may intervene after the rush cools, so rupee could hold the key. Consensus is of a 80-82 range for 2022.