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Equity markets are expected to open in negative on Wednesday amid weak global cues. Over-heated US stocks closed in the negative on Tuesday. While Dow Jones Industrial Average and S&P-500 closed about 0.3 per cent down, tech-focussed Nasdaq slipped 0.6 per cent. Asian markets too were down in early trade on Wednesday, falling between 0.2-0.9 per cent.
SGX Nifty at 17,962 indicates a 100-point gap-down opening for Nifty futures which, on Tuesday, closed at 18,070.
FPIs in selling mode
According to experts, unless FPIs are willing to commit big on Indian markets, benchmarks will face strong resistance. Foreign portfolio investors continue to remain on sell mode. On Tuesday too, they have offloaded shares worth ₹2,500 crore.
However, the underlying economic growth story will help market sustain around current levels, they added.
“Domestic markets witnessed high volatility in recent weeks as there was no positive surprise from Q2FY22 earnings especially due to higher input costs weighing on investor-sentiments. Notably, high input costs have adversely impacted margins and profitability of consumer and manufacturing companies despite steady volume and sales growth,” said Binod Modi, Head Strategy at Reliance Securities.
Ruchit Jain, Trading Strategist, 5paisa.com said, “On Tuesday, we witnessed good stock specific momentum, which is a sign that the broader markets may relatively outperform the index in short term.” Hence, traders should be focused on stock specific movement and look to pick up outperforming counters from a trading perspective, he added.
Deepak Jasani, Head of Retail Research, HDFC Securities, said that boosted by a $1 trillion US Infrastructure Bill, global stock markets remained close to their all-time highs on Tuesday but investors were reluctant to commit further to the rally before getting a clearer picture of the surge in USinflation.
Liquidity driven market may take a backseat in 2022 and investors must start focusing on quality aspect of companies, added Modi.
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