InvestorQ : How do you see the Nifty and Sensex shaping up on Tuesday 16 March? Do you see more correction or you see market stabilizing?
Dia Deshpande made post

How do you see the Nifty and Sensex shaping up on Tuesday 16 March? Do you see more correction or you see market stabilizing?

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diksha shah answered.
3 weeks ago
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The markets continued to be tentative on Monday as a combination of factors pushed the Nifty again below 15,000. The Nifty has been struggling around these levels. Some of the triggers for the fall included rising Coronavirus cases in India, risk of fresh lockdowns, rising bond yields in the US and the forthcoming FOMC meet on 17 March.

One trend seems to be that investors are continuously taking profits off the table at every opportunity. Also, with global cues tentative ahead of the FOMC policy meet, and traders were being cautious on high beta names. One segment that has actually seen a flurry of interest even in the midst of these weak markets is the steel sector on robust demand.

The tide appears to have turned with respect to the global institutional investors. FPI action was negative on Monday also with net selling of Rs.1101 crore as domestic institutions sold Rs.750 crore of equities. FPI selling trend started in late February and now FPIs have already sold more than Rs.8,500 crore in in the first 9 trading session in March.

In terms of global cues, there were positive cues with the Dow Jones Index up 60 bps and the NASDAQ up over 105 bps on Monday. However, the European indices like FTSE, CAC and DAX were in moderately negative zone on Monday. Tuesday could still remain tentative ahead of the US rate and taper decision that is likely on 17 March, Wednesday.

Coming back to the question on further correction, I think a lot will depend on how the Fed language pans out on Wednesday after the FOMC meet. The markets are expecting some reaction from the Fed on rising bond yields and they want it to be followed up with positive action. If the Fed shows that kind of action orientation, markets will be mighty pleased.

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