Heavy Selling Witnessed From the FIIs in the Indian Markets |
Posted: November 8, 2016 |
The last two trading sessions have been a revelation that the FIIs who have been bullish in the last few months have been sellers in both cash equity and debt markets. On the face of it, there seems to be profit booking as they have been big buyers since the month of May. But the biggest fear is that there is a high probability of the US interest rates going up with the US presidential candidate Hillary Clinton having an upper edge in the elections happening today with the results due tomorrow at 10 AM Indian Standard Time (IST).
The entire world is eagerly waiting for the results to unfold tomorrow and find out who America has elected as its latest president, the Republican candidate Donald Trump or Democratic candidate Hillary Clinton. The outcome of the election is expected to impact the emerging markets too along with the US economy.
The US three month treasury, the biggest indicator for short term interest rate a hike have given a breakout of 0.38 per cent and is currently trading at 0.40 per cent as per the research team of Dynamic Levels. Last time the market witnessed such tremendous breakout was in the month of November 2015, where the fear of fund flow getting drained out of the emerging economies such as China and Saudi Arabia, bought down the Global equity market to a great extent, as much as 5 to 7 per cent.
December meet which is long overdue, there could be increase in volatility as FIIs pull out money along with the year end considerations. Markets can remain under pressure from the 9th November, which is tomorrow as the US presidential election wraps up with the results announcement and the focus will then shift to the expected interest rate hike in the economy scheduled on 14th of next month.
NSE’s benchmark Index Nifty has seen selling from the level of 8900 and is currently trading at the three month low of 8500. The massive selling in the last month has also taken its toll in the market. Therefore one can expect to see volatility with a downward bias in India and all the emerging markets.
At the moment Nifty share price is trading at 8,487.15, down by 0.12 per cent or 9.90 points. The best performers of Nifty shares are Tata Motors, Tata Motors Dvr, BHEL, Hindalco and Axis Bank in today’s trading session.
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