Hello reader, hope you’re doing well. Weakness in the Gift Nifty index could drag local indices in early Tuesday trades even as US indices closed in positive territory and Asian indices are displaying a firm trend. Select profit taking may continue as higher valuations are making investors nervous due to global uncertainty and disappointing earnings from some of the blue chips. Investors would be maintaining a cautious stance ahead of tomorrow’s US FOMC meeting outcome on interest rates, as any hint of any pause in key rates going ahead would fuel optimism and revive the sentiment. Technically, hurdles for Nifty are seen at the 19887 mark on a closing basis, while support is seen at 19500 mark.
In the last two days FPIs have sold stocks worth Rs 2081 crores indicating buying exhaustion. This is normal response to the rising dollar index which has moved up to 101.4 from the recent low of 99. Even though Nifty is showing signs of resilience, it is unlikely to race to 20000 level in the next few days, given the rising dollar and declining FPI inflows. Brent crude spiking to $82 will be another drag on the market. Globally markets will be keenly watching the Fed commentary since a 25 bp hike in rate is already known and discounted by the market. Q1 results due today- Tata Motors, Bajaj Auto – and expected tomorrow- Axis Bank, Cipla, Dr Reddy’s, Bajaj Finance, Tech Mahindra – will influence stock prices and market sentiments.
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.