Foreign institutional investors (FIIs) took to selling again on Friday, August 25, ahead of the ahead of the US Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. The domestic institutional investors (DIIs) were net buyers again and invested ₹1,414 crore during the session.
As per the NSE data, FIIs cumulatively bought ₹10,929.61 crore of Indian equities, while they sold ₹15,567.82 crore — resulting in an outflow of ₹4,638.21 crore. Meanwhile, DIIs infused ₹8,542.44 crore and offloaded ₹7,128.09 crore, registering an inflow of ₹1,414.35 crore.
US stocks opened higher on Friday ahead of a keenly awaited speech by the Federal Reserve Chairman at the Jackson Hole summit that could indicate the central bank’s interest rate move at its next meeting in September.
The Dow Jones Industrial Average rose 117.64 points, or 0.34 per cent, at the open to 34,217.06. The S&P 500 opened higher by 13.07 points, or 0.30 per cent, at 4,389.38, while the Nasdaq Composite gained 50.40 points, or 0.37 per cent, to 13,514.37 at the opening bell.
On Friday, domestic equity benchmarks Sensex and Nifty extended losses for the second consecutive session as the market witnessed an all-round selloff while investors directed their attention towards the Jackson Hole symposium in search of indications about the future direction of interest rates. In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled in the negative territory.
Sensex closed with a loss of 366 points, or 0.56 per cent, at 64,886.51 while the Nifty50 closed the day at 19,265.80, down 121 points, or 0.62 per cent. All sectors traded in sync with the benchmark wherein realty, metal and pharma were the top losers.
For the week, Sensex slipped by 0.10 per cent while the Nifty declined by 0.23 per cent. On the other hand, the BSE Midcap index rose 1.50 per cent while the Smallcap index jumped 2.19 per cent for the week.
‘’The message from the Fed chief Jerome Powell tonight will be keenly watched for any clues on the future trajectory of interest rates in the US. The Fed chief is unlikely to indicate that the rate hiking cycle is coming to an end,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
‘’An unhealthy trend in the market is the sustained rise in the prices of many small-and micro-cap stocks. This is partly aided by the sustained flow of funds into the small-cap segment. Valuations in the segment are approaching risky levels. Safety is now in large-caps,” added Dr. V K Vijayakumar.
The slide in domestic equities on Friday also came after the minutes of the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) latest policy meeting flagged near-term risks to inflation due to a recent spike in food prices and a liquidity overhang in the banking system.
Where is Nifty headed?
“The Nifty index has declined to a significant moving average (55EMA) support level. The sentiment is expected to stay bearish as long as the index remains below 19,450, where the 21-day Exponential Moving Average (EMA) is positioned on the daily timeframe. If the index decisively falls below 19,240, it could potentially lead the Nifty towards the 19,000 mark,” said Rupak De, Senior Technical Analyst at LKP Securities.
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Updated: 25 Aug 2023, 07:15 PM IST