Hello reader, hope you’re doing well. Even when the market is scaling new highs and the undercurrent is positive, there are strong views that the current high valuations cannot be sustained for long. It is important to understand that the DIIs are not bullish about the market at the current elevated valuations. They were sellers in 12 out of the last 13 trading sessions and have cumulatively sold for Rs 16321 crores and may sell more at higher levels. In January and February when the FIIs were selling DIIs were consistent buyers. The 3,000 point rally in Nifty from the March lows has given DIIs huge profits and, therefore, profit booking would be a rational response. Selling and profit booking at high levels are easy decisions while buying at high prices can be risky. The demerger of Jio Financial Services from RIL and the Q1 results of Infosys, HUL and a host of mid-cap IT companies can cause a lot of price action in the market today.
Gold and silver prices ended flat on Wednesday, although the bullions witnessed some mild profit taking from the shorter-term futures traders following a mid-week bounce in the U.S. dollar index. However, the charts have turned near-term bullish for both the metals. Post disappointing U.S. retail sales and core retail sales data, the U.S. housing data also was dismal and supported the dollar index. The dollar index tested the 100 mark once again and limited gains of precious metals. However, due to weakness in the rupee, bullion prices in the domestic markets settled on a positive note.
Reliance Strategic Investments demerged from Reliance Industries and will be renamed Jio Financial Services (JFS) and be listed on exchanges at a later date. According to the scheme of arrangement, shareholders of RIL will get 1 share of the demerged entity Reliance Strategic Investments for every 1 share held by them in the conglomerate.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.