InvestorQ : How do you see the Nifty and Sensex panning out on 18 March, Thursday? Why are markets correcting so relentlessly?
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How do you see the Nifty and Sensex panning out on 18 March, Thursday? Why are markets correcting so relentlessly?

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diksha shah answered.
3 months ago
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If Friday, Monday and Tuesday were bad for the markets, then Wednesday continued the disappointment for the markets. The 15,000 levels is proving to be a resistance for Nifty as Sensex has also now settled below the 50,000 mark. It appears to have become a sell-on-rises market where every time the market bounces, there appears to be a rush to sell.

The Federal Open Market Committee or the FOMC maintained status quo on rates at 0.00-0.25%. For now, this sets to rest any doubts about the taper or about the interest rates being hiked. However, markets may be a tad disappointed as they were expecting some concrete announcements from the Fed on pushing down the bond yields in the US.

FPI action was positive on Wednesday, and that was a major relief as the sudden shift to selling appears to have waned. There was net buying of Rs.2626 crore by the FPIs, even as domestic institutions including mutual funds sold Rs.562 crore of equities. In just the last 2 days, FPIs infused Rs.4300 crore despite the weakness in markets, which is encouraging.

While the Fed maintained its stance, the markets were disappointed by the Fed not announcing measures to bring down bond yields. However, after the FOMC announcement, the Dow and the NASDAQ did see some positive reaction even as the SGX Nifty has also gained more than 110 basis points in early trades on Thursday.

Over the last few days, I have been telling you that the FOMC outcome could be the real story for the markets. Now the FOMC has given its status quo verdict on rates and on bond buying. That is good. Above all, the Fed has also said that it will not budge on its interest rate stance till the end of 2023, which gives a lot more stability.
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