Indian stock markets traded in a back and forth on the day action reminiscent of tug-of-war between cheerleaders and mountebank charlatans, shares moved all over the place today. The Sensex and Nifty 50 witnessed intraday volatility with respect of market reacting to emerging signals from both domestic and global source.
The 2nd session indicator posted a steady uptrend, but cautiously so, as there was uptick momentum state sectors such as in IT and pharma. But that initial bullishness had little staying power as profit-taking at deeper levels took over, creating a selling pressure followed by consolidation. Investors were still cautious of global economic risks primarily the looming interest rate increases across major economies and escalating geopolitical tensions.
Sector performance was sharply differentiated. Although the IT sector saw some profit-taking, it remained to be a fairly stable position with strong earnings release from major constituents. The pharma sector too showed some resiliency due to positive drug trials and the increased demand. On the other hand banking and financial services witnessed sharp selling under pressure regarding asset quality and regulatory changes The auto sector was highly volatile with deals receivable only in a few exchange hands amid supply chain disruptions.
Investors turned selective on Mid-cap and small cap stocks focused on the quality companies that had fundamentals as well as tremendous growth credit. But overall sentiment at large remained cautious, there was no other way you could really read the chop.
Today’s market was influenced by the following key factors:
GeoEconomic Clues: lingering worries about hits to global economic growth from slowing major economies and where and when world rates might rise continued to hammer sentiment in financial markets.
Domestic Economic Indicators: Industrial production and inflation data released in the week offered contradictory signals to blame or argue about which most reflected chaotic markets.
Corporates Earnings: The earnings season continued to be a key market mover as stock prices were more volatile on company specific results.
FII flows (Foreign Institutional Investor FII): Its worth to note that FII flows continued to strongly define market direction as it reflects the global investor sentiment and risk appetite.
They noted a pull-back from the rallies: ‘analysts saw sync-reading and investors taking measured positions. Short-term volatility is predicted to continue with the backdrop of global uncertainties and some domestic economic data releases to come in. There was the stuff of long term optimism around the potential for continued strength of Indian markets supported by fundamentals and expected policy reforms.
