What is your view on the stock market trading for 21 June? Do you see the correction continuing further from these levels?

It must be said that the bounce in the second half of Friday was a lot more surprising as the day had started extremely weak. Towards the end, the Nifty and Sensex closed flat. For the full week, Nifty lost 116 points, which is not too much considering the type of massive losses suffered by the Adani stocks and the metal sector during the week.

MPC minutes announced on Friday are surely hinting at continuation of the accommodative stance. However, we must also remember that the minutes pertain to 04 June. That is well before the CPI inflation for the month of May came in at 6.3%, core inflation for May at 6.6% and the Fed minute hinted at 2 rate hikes by 2023. These are not factored in.

FPI action was positive on Friday with net buying of Rs.2,681 crore while the domestic institutions bought equities worth Rs.446 crore. The gross FPI volumes on Friday were close to Rs.40,000 crore clearly showing the presence of substantial chunk of block deals among institutions. Hence, the large by figure could be misleading and not really representative.

Global cues are really weak as we start trading on Monday. Friday saw the Dow and NASDAQ down 1.7% and European markets losing up to 1.9%. In early morning trades on Monday, the SGX Nifty also trades about 150-170 points lower, dampening sentiments. That is likely to remain an overhang for Monday trading.