Foreign Cues Causes Dent In Indian Equity Market

The losses in the big bulls of NSE have caused Nifty50 to stay cautious in this week’s trading. Losses of L&T, HDFC, Sun Pharma, RIL, M&M and ONGC have pulled the reigns of otherwise gung-hoed market. Nifty share price managed to hold its crucial support of 8,600 but traded flat. The hold was on the back of gains in Consumer Durables and IT sector. Both the major indices were still showing red flags in today’s trade. Both the bourses witnessed heavy selling in IT, Technology, Media and Entertainment and Automobiles stock.

In today’s trade, Sensex opened with a drop of 20 points at Rs. 27965, while towards the close, it went further down by 62 points at Rs.27,921.95. While, Nifty share price opened at Rs. 8,621 down by 8 points and towards the end of trade dropped further by 21 points to Rs. 8608.15.

What’s cooking?

The market became volatile ahead of Thursday’s expiry of August series futures and options contracts. All eyes are on the US Fed Chair Janet Yellen’s Jackson Hole speech scheduled later this week. Investors are cautious of a probable rising of interest rates in the US as this can potentially pilot Foreign Portfolio Investors away from up-and-coming markets such as India. So far in this month they have bought equities worth Rs. 8,266 crores. Investors are also unsure about the near term rate cuts as RBI Governor indicated of taking the stance of continuing RBI policy. The rupee turned weak by 13 paisa to 67.19 against USD. The interim data with the exchanges indicated that the Foreign Institutional Investors sold stocks worth Rs. 300.50 crore. On the other hand, Domestic Institutional Investors bought scrips worth Rs. 52.50 crore. The technical charts are turning bearish. The trading in benchmark indices are getting tapered every passing day. A short term correction is due and the market is heading for 8,400 or 8,450 levels in the upcoming few days.

Sector Stage:

The S&P BSE IT Index dived low, the technology, entertainment and Media Index or TECK Index plunged as well, and the automobile index was also red. While, on the other hand the S&P BSE fast moving consumer goods or FMCG Index hiked and the consumer durables Index edged up.

Asian Mix:

Asian market spelled mixed reaction throughout today’s trade. Nikkei, Japan’s benchmark index flagged red along with Hong Kong’s Hang Seng. While, China’s CSI 300 went green and South Korea’s Kaspi and Taiwan’s TWSE tagged along.

The Rollovers:

The market-wide rollovers to September F&O series stood at 29% on D-3. In past three series, the average rollover was 28%. For Nifty Futures, the rollover is viewed at 39%, while for past three series it stood at the average of 31%. The net short positions have been rising consistently indicating towards the fresh arbitrage during the month.

Off-late, the market has been driven entirely by the torrent of Liquidity flowing in the emerging market. But, the trajectory of those flows will be determined by the speech of Fed Chair. It is the speech that will decide whether the liquidity will continue to flow or slow down.

A writer by day and a passionate reader by night. Writing just doesn't fill my pocket but it also fills my heart. Passion for writing about new events & happenings is what soothes my mind & soul.