Indian stock markets went down on Monday because of bad news from other countries. The S&P BSE Sensex was down more than 600 points, or 1.08 percent, and was just above 59,000, while the NSE Nifty 50 index was down about 200 points, or 1.10 percent. The Bank Nifty fell by more than 1.5%, and the India VIX went up by 4% and crossed 19 levels. Analysts think that the recent hawkish comments made by the US Fed and the rise in the dollar index may be to blame for today’s profit taking. The minutes of the Reserve Bank of India’s policy meeting worried investors because they hinted at future interest rate hikes.
“After a sharp rise, Indian stock markets are starting to take profits. Profit-taking can be explained by weak global signals, a rise in the dollar index, and hawkish comments from the US Federal Reserve. The overall structure is still bullish, according to Swastika Investmart Ltd. Head of Research Santosh Meena. 17,500 is an immediate support area, and 17350/17150/17000 are rock-solid support levels. Traders and investors may buy the dip in a scattered way between 17500 and 17000.” Technically, the Nifty fell below the psychologically important level of 18,000 because most momentum indicators showed that the market was already too high.
Dollar index goes up
The US 10-year yield is currently around 2.99%. This is because investors are worried about a slowdown in global growth and the US Federal Reserve’s policy of tightening, which has made investors less optimistic. Also, you should know that the dollar index is back above 108. Thomas Barkin, president of the Fed Bank of Richmond, said on Friday that the central bank was determined to get inflation back to its target of 2%, even if it meant starting a recession in the US. Now, everyone will be watching Fed Chair Jerome Powell’s speech on the economy on Friday. People in the market could use his speech to figure out how quickly rates will go up in the future and to understand what the US Fed said recently.
“Markets are still going down because of what’s going on in the rest of the world, just like they did on Friday. Even though Q1-FY23 results were not good, the market as a whole has grown by about 17% since mid-June. After the results in June, Nifty’s estimates for future earnings have dropped by about 15% up to this point. At its current price, the Nifty is fully valued at 22 times its trailing earnings. The markets will probably take a break for a few months to let off some steam. Vineet Bagri, managing partner of TrustPlutus Wealth India, says, “The markets will consolidate as FPI inflows resume, commodity prices fall, and inflation goes down because of good monsoons.”
Watch for a pullback around 17,000 before getting into the market.
After the US markets fell sharply on Friday, benchmark indices continued to fall on Monday. According to Rahul Goud, Research Analyst – Equity Research, CapitalVia Research, the banking and IT sectors were the worst hit. The mood on the market is being affected by the rising dollar index, which has hit a new five-week high after a US Federal official said that aggressive monetary tightening may continue. Also, rising inflation is a big worry for markets around the world. Before getting into the market, we tell traders to wait for a retracement near the nifty 17,000 level,” Goud said.
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