Market may tumble in early trade on weak global cues

27 Jan 2022 , 08:30 AM

Trading could be volatile as traders roll over positions in the F&O segment from the near month January series to February series. The January 2022 F&O contracts will expire today, 27 January 2022.

SGX Nifty:

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slump 356 points at the opening bell.

Build up to the upcoming budget session would be the key event that the market would be looking for in the near future. The Budget session of Parliament is set to commence on January 31 and will conclude on April 8. The government will present the Budget for fiscal 2022-23 on February 1. The Economic Survey is likely to be tabled on January 31 after the presidents address, as per reports. Investors will also continue to monitor the situation surrounding the omicron COVID-19 variant.

Meanwhile, the International Monetary Fund (IMF) has raised its forecast for growth in Indias gross domestic product (GDP) in FY23 by 50 basis points (bps) to 9%. Indias GDP growth forecast for FY24 was also raised by 50 bps to 7.1%. Explaining the upward revision in an update to its World Economic Outlook report, the IMF said it expects an improvement in Indias credit growth which would boost consumption and investment and better-than-anticipated performance of the financial sector.

On the political front, developments in the upcoming assembly polls in Uttar Pradesh, Uttarakhand, Goa, Punjab, and Manipur will be closely watched. Polls in all the five states will be held between February 10 and March 7 in seven phases. The counting of votes and the result will be declared on March 10.

Global markets:

Overseas, Asian stocks are trading lower on Thursday as investors digest an overnight update from the U.S. Federal Reserve that indicated the central bank plans to raise interest rates as soon as March. The Taiwan market is closed for a holiday on Thursday.

U.S. stocks fell on Wednesday after the Federal Reserve signaled an interest rate hike could be coming soon, while supply concerns stemming from tension between Russia and Ukraine saw oil prices touch highs not seen since 2014.

The Federal Reserve on Wednesday said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month in what U.S. central bank chief Jerome Powell pledged will be a sustained battle to tame inflation.

The committee is of a mind to raise the federal funds rate at the March meeting assuming that the conditions are appropriate for doing so, Powell said in a news conference, pinning down a policy statement from the central banks Federal Open Market Committee that only said rates would rise soon.

Domestic markets:

Back home, the domestic stock market remained closed on 26 January 2022 on account of Republic Day. The benchmark indices advanced on Tuesday, snapping a five-day losing streak. The barometer index, the S&P BSE Sensex, jumped 366.64 points or 0.64% at 57,858.15. The Nifty 50 index advanced 128.85 points or 0.75% at 17,277.95.

Foreign portfolio investors (FPIs) sold shares worth Rs 7,094.48 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 4,534.53 crore in the Indian equity market on 25 January, provisional data showed.

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