Gift Nifty indicates a weak opening for domestic markets on Wednesday. Analysts expect the market to remain volatile ahead of the Fed policy outcome that will be out post market hours. Another big selling of over ₹6,400 crore by foreign portfolio investors on Tuesday rekindled fears again among market participants, who believed that their selling is over. After pulling out nearly ₹1.3 lakh crore in October and November, FPIs have stopped selling and resorted to buying in Indian equities in December.
Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher, said: Investor sentiment remained cautious ahead of the US Federal Reserve’s monetary policy meeting, scheduled for Wednesday. “While markets have priced in a 25 basis points rate cut, much of the focus is on Fed Chair Jerome Powell’s commentary regarding future rate moves. Global markets were weak, and the Indian rupee fell to a lifetime low of 84.92 against the US dollar, weighed down by foreign fund outflows and weak domestic equities.”
Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said: Tuesday’s decline came amid weak FII volumes and heightened caution ahead of the US Federal Reserve’s monetary policy meeting, which is expected to provide cues on the trajectory of interest rate cuts going ahead. Investors will watch out for US retail sales data to be released later today. Despite the market volatility, there is continued action in the primary markets, with eight new IPOs opening for subscription this week and three IPOs, including One Mobikwik, Vishal Mega Mart, and Sai Lifesciences listing on the stock exchanges tomorrow.
As volatility is also on the rise, experts advise investors to remain cautious.
According to Hardik Matalia, Derivative Analyst, Choice Broking, said: The India VIX increased by 3.32 per cent to 14.4850, indicating a rise in market volatility and growing uncertainty, which could lead to increased price fluctuations. This makes it important for traders to remain cautious, he said, adding that Open Interest (OI) data shows the highest OI on the call side at the 24,500 and 24,700 strike prices, signalling strong resistance levels. On the put side, OI is concentrated at the 24,200 and 24,000 strike prices, highlighting these as key support levels.
