InvestorQ : What is your view on the stock market performance for Wednesday the 20th of July? Were you surprised by the sharp bounce on Tuesday?
Dhwani Mehta made post

What is your view on the stock market performance for Wednesday the 20th of July? Were you surprised by the sharp bounce on Tuesday?

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diksha shah answered.
4 weeks ago
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It was a surprisingly close for the markets on Tuesday. The Nifty closed at 16,341, up 62.05 points, although the early indications of the market trend were negative. The advance /decline ratio was favourable at 29:21. The rupee weakened beyond 80/$ and only survivied below 80/$ due to RBI intervention towards the end of the day.

The themes that dominated the Nifty performance on Tuesday were banks, autos and metal stocks. Among the major gainers were Axis Bank, Apollo Hospitals, Mahindra & Mahindra and IndusInd Bank. Key losers for the day were ONGC, HDFC Life and Nestle India. Banks bounced sharply on hopes of a more sober Fed eschewing the temptation of 100 bps hike.

Foreign portfolio investors net bought equities worth Rs.976 crore as domestic funds sold stocks worth Rs.101 crore on Tuesday. However, it may be too early to call an FII trend. In global indices, Dow was up 755 points and NASDAQ was up 353 points. Europe was in the positive by 1.5-2.5% while SGX Nifty is higher by 70 bps in early trades.

Finally, there seems to be a lot of euphoria around the expectation that Fed may not hike by 100 bps in July. However, that would only mean 75 bps instead of 100 bps, which is still fairly hawkish. Fed is unlikely to change its course of action till it crosses the critical neutral rate of 2.50%. It is still too early for bottom fishing as there could be one more sharp fall.

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