Markets all set to see a day heavy in red

3 Nov 2022 , 08:56 AM

Indian equity markets look all set to see a day in red. US Federal Reserve increased interest rate in US by another 75 basis points yesterday. Federal Reserve Chairman, Jerome Powell, said that it is still too early to stop the current round of interest rate hikes. He also said that the magnitude of total interest rate increase will be much more than originally estimated. This continued hawkish stand of Federal Reserve has considerably increased the probability of a prolonged global economic recession.

US markets ended the day, yesterday, sharply lower after the 75-basis point interest rate hike announcement by US Federal Reserve. Down Jones ended, down by 1.55%. Nasdaq ended, down by 3.36%. NYSE ended, down by 1.98%. S&P 500 ended, down by 2.5%. The Federal Reserve indicated that it would look into data when announcing the next interest rate hike.

 Asian markets too are reacting negatively to interest rate hike by US Federal Reserve. Japanese ‘Nikkei’ is closed for holiday today. Taiwanese index is down by 1.08%. South Korean KOSPI is down by 0.60%. Shanghai index is down by 0.10%. ASX is down by 1.90%.

Nifty saw profit booking before the Federal Reserve meet. Local funds sold stocks for the 5th straight day even as foreign investors bought for the longest consecutive period of over 6 days. Hindalco, Sun Pharma and ITC led the gainers. Bharti, Apollo Hospital and Maruti led the losers. Mid- caps also saw profit booking. Nifty Next 100 ended the day, down 0.33%.

Technical View: Nifty likely to find support at around 17850. 18400 is likely to act as resistance on the upside. Bank Nifty likely to find support at around 40800. 41800 is likely to act as resistance on the upside. 

TRADING call (1-2 days): Sell Wipro November future at 392-395. Stop loss: 401.25. Target: 386.

Derivative call- time period:(1 month): Sell Tata Steel November future at 101-102. Stop loss: 103.55. Target: 99.25.