Indian Equity Benchmarks Hit One-Month Low Amid Global Rate Fears
Dear Trader
Markets remained volatile for yet another session and lost nearly half a percent. After the gap-down start, Nifty further drifted lower in the first half however recovery in select heavyweights trimmed the losses as the day progressed. Meanwhile, most sectors continued with a negative tone wherein realty, pharma and financials were among the top losers. The broader indices too felt the heat and lost over a percent each.
We may see some respite in the index after the recent slide but the upside seems capped citing feeble global cues. On the other hand, the broader indices are now showing early signs of exhaustion, which may prompt fresh fall in the midcap and smallcap space. We thus recommend focusing more on trade management and maintaining positions on both sides.
Strong US job data is reinforcing Fed's hawkish stance and multi-year high US bond yields is signalling an impending interest rate hike. Globally, investors are adopting risk-averse strategies due to inflation concerns and the strengthening US dollar. And in India, despite a robust economy, premium valuations of midcaps and recent rally is augmenting consolidation.
Interest-rate-sensitive sectors like real estate, banking, and metals are the most impacted category, while the FMCG sector is more optimistic in expectation of near-normal monsoon & festival demand. Auto is consolidating amid mixed growth numbers and in this weak period, large-cap are a trading safe to hold on.
Nifty futures opened at 19474.10 points against the previous close of 19571.50 and opened at a low of 19362.80 points. Nifty Future closed with an average movement of 118.20 points and a decline of around 93.30 points and 19478.20 points...!!
On the NSE, the midcap 100 index will decline 1.38% and smallcap 100 index is closing decline 1.25%. Speaking of various sectoral indices, the NSE saw gains in only, IT and FMCG stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, October gold opened at Rs.56237, fell from a high of Rs.56631 points to a low of Rs.56225 with a rise of 352 points, a trend of around Rs.56631 and December Silver opened at Rs.67024, fell from a high of Rs.67550 points to a low of Rs.66901, with a rise of 42 points, a trend of around Rs.67436.
Meanwhile, The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL. In equity segment, the gross buying was of Rs 11640.59 crore against gross selling of Rs 12476.65 crore. Thus, FIIs stood as net sellers of Rs 836.06 crore in equities. In the debt segment, the gross purchase was of Rs 1956.22 crore with gross sales of Rs 557.79 crore. Thus, FIIs stood as net buyers of Rs 1398.43 crore in debt. In the hybrid segment, the gross buying was of Rs 54.84 crore against gross selling of Rs 70.20 crore. Thus, FIIs stood as net sellers of Rs 15.36 crore in hybrid segment.
Technically, the important key resistances are placed in Nifty future are at 19505 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 19570 – 19606 levels. Immediate support is placed at 19404 – 19373 levels.
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