Nifty50 set to finish monthly F&O series in the red — key factors that influenced the market

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The Nifty50 is on course to finish the September futures & options series in the red — its first negative series in two months and the worst one since May 2022. Here’s a look at the key factors that influenced Dalal Street in the September series.

Despite a rebound on Dalal Street following six back-to-back days of relentless selling, the Nifty50 benchmark is set to finish the September derivatives (futures & options) series in the red. At Wednesday’s close, the 50-scrip gauge has lost 663.9 points or 3.8 percent of its value in the current series. This will be the first negative series since June.

Even at the day’s high above the psychologically-important 17,000 mark on Thursday, the Nifty is down 2.8 percent for the current series. This means that later in the day, the market will settle with its worst performance in a monthly series since May 2022.

The Nifty50 made a sharp U-turn in the second half of the month after coming within a little more than 500 points or 2.7 percent of its all-time high, clocked in October 2021. A global sell-off triggered by a third straight hike of 75 basis points in key rates and the Fed’s persistently hawkish commentary dented the sentiment on Dalal Street.

A reversal in foreign fund inflows — as the dollar’s moves near 20-year highs against six currencies other than the rupee make emerging markets less attractive — has fuelled the downward pressure in the Indian market.

Foreign portfolio investors (FIIs) have remained net sellers of Indian shares for six days in a row — their worst withdrawal in about three months, according to provisional exchange data.

Here’s a list of factors that influenced the market in the September series:

  • US rate hike and hawkish Fed commentary
  • Foreign fund outflows
  • Dollar at 20-year highs
  • Rupee at all-time lows against the dollar
  • Crude oil at 9-month lows
  • Fears of a slowdown
  • Overheated Indian valuations
  • The market is set to enter the October series on Friday, September 30, with the outcome of three-day deliberations at the RBI’s rate-setting panel — the Monetary Policy Committee.

    Economists in a CNBC-TV18 poll expect the central bank to announce a hike of 50 bps in the repo rate — or the key rate at which it lends money to commercial banks.

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