Foreign institutional investors (FIIs) paused their selling spell on Friday, October 20, even as US bond yields rose to their 16-year high mark and domestic markets settled lower for the third straight session. The domestic institutional investors (DIIs) were also buyers and infused ₹8 crore in Indian stocks today.
As per the NSE data, FIIs cumulatively bought ₹13,645.57 crore of Indian equities, while they sold ₹13,189.36 crore --- resulting in an inflow of ₹456.21 crore on Friday. Meanwhile, DIIs infused ₹6,870.72 crore and offloaded ₹6,862.19 crore, registering an inflow of ₹8.53 crore.
The US 10-year Treasury yields are near their 16-year high level boosted by the prospects of another rate hike. Federal Reserve Chairman Jerome Powell on Thursday said that more interest rate hikes may be required to bring inflation down to a 2 per cent target because of a tight labour market and resilient US economy.
“Global equity markets reacted to concerns of rising interest rates, energy prices, and bond yields. Sensex 30 and Nifty 50 declined, while midcap and smallcap indices saw mixed performance. BSE Auto index outperformed. Stock movements were influenced by Q2FY24 earnings. Crude oil rebounded, and the 10-year US treasury yield rose, near 5 per cent,'' said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Domestic equity benchmarks Nifty 50 and Sensex ended in negative territory for the third consecutive session on Friday, October 20, as concerns about potential interest rate hikes by the US Fed, and the ongoing war between Israel and Hamas kept investors on edge.
Nifty 50 today closed at 19,542.65, down 82 points, or 0.42 per cent while the Sensex ended the day at 65,397.62, down 232 points, or 0.35 per cent. Mid and smallcaps suffered bigger losses. The BSE Midcap index fell 1.02 per cent while the Smallcap index dropped 0.76 per cent.
"The added uncertainty stemming from West Asia tensions and the imperative for continued monetary tightening emphasized by the US Fed Chair created a layer of volatility in the market. While heightened oil prices and elevated US bond yields will impact the domestic monetary environment and operational metrics of the companies,'' said Vinod Nair, Head of Research at Geojit Financial Services.
Geojit's Vinod Nair added that the varied results of blue-chip companies, influenced by subdued global and domestic demand, are steering the market towards a consolidation trajectory in the near term.
‘’Weak global cues combined with pressure in the key sectors are currently weighing on the sentiment and we don’t expect relief anytime soon. Traders should align their positions accordingly and continue with a hedged approach,'' said Ajit Mishra, SVP - Technical Research, Religare Broking.
Technical View: ‘’Technically, Nifty could find support at the 19,501 mark, while any uptick would be seen only if the index breaches its biggest hurdle at the 19,887 mark,'' said Prashanth Tapse, Senior VP (Research), Mehta Equities.
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