Markets may see selling by foreign investors today too

6 Jan 2023 , 08:55 AM

Indian equity markets may again see selling by foreign investors today. Foreign investors seem to be getting diverted towards Chinese and Hong Kong stock markets. Hawkish stand of US Federal Reserve on inflation, as revealed by the minutes of its recent meeting, may also have dampened sentiments of foreign investors regarding emerging markets such as India. Any further interest rate hikes by RBI to match the interest rate hikes of US Federal Reserve will seriously damage the prospects of Indian economy. FDI inflows into India in the April – December, 2022 period has come down significantly.

US markets slipped deeper into the red yesterday. Strength in US dollar saw equities lose ground with jobless claims number being weaker than expectations. Bond yields rose to 3.72%.  Oil rose by US$1.5 to close near $79 per barrel. Dow Jones closed lower by 339 points.  Nasdaq closed, down by 153 points.
 
Asian markets have opened mixed today. Japanese ‘Nikkei’ is trading higher by 130 points. The star outperformer, Hang Seng index, has resumed its rally. It is trading higher by 50 points. It is seeing gains of over 40% from the lows of October. Chinese stocks see ETF flows on the back of reopening & attractive valuations.
 
Nifty saw another volatile session yesterday. The index gyrated over 228 points before closing lower by 55 points. Bank Nifty led the decline, closing lower by 355 points, after being down by over 800 points in intra-day trading . Bajaj Finance, Bajaj Finserv, ICICI, Infosys and Titan led the losers. Cipla, Bajaj Auto and ITC led the gainers. Mid-caps bucked the trend. Nifty midcap 50 index closed higher by 0.72% 

Technical View: Nifty is likely to find support at around 17850. 18400 is likely to act as resistance. Bank Nifty is likely to find support at around 42200. 43450 is likely to act as resistance on the upside.

Trading call:(1-14 days): Sell Hindalco January future @465-468. Stop loss: 475.3.  Target: 457.5.

Derivative call-time period: (1 months): Sell Hindustan Copper January future @ 115.5-116.5. Stop loss :118.8. Target:113.5.