Reducing geopolitical tension, fall in crude oil prices, US Fed’s expected results and short covering saw the Indian market rally for the second consecutive week. Santosh Meena, Head (Research) Swastika Investmart said this in a column written for Livemint.
FII sold 2.3 lakh crores in five months
Meena said FIIs, who have been selling for the last five months, returned with some buying last week and now it will be interesting to see how the market performs if they continue to buy. In the last 5 months, he has sold Rs 2.3 lakh crore in the Indian equity market, which is the highest selling ever. Earlier in 2008, during the Global Financial Crisis, the highest was sold of about Rs 1.3 lakh crore. Interestingly, Nifty and Sensex had lost around 60-65 per cent in 2008 due to selling of Rs 1.3 lakh crore, while this time around 15 per cent are broken despite more selling.
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Domestic capital has shown flexibility
This time domestic capital showed strong resilience and it showed that we are no longer completely dependent on FII flows, Meena said. Our markets are in much better shape than most emerging markets and we have witnessed a strong rally from lower levels. The reason for this is the feeling of missing out (FOMO) to some extent among FIIs and they can return to the Indian markets with enthusiasm, which can see a strong rally in the market.
There may be ups and downs due to news
The impact of the Russia-Ukraine issue has already been visible on the market, although the market may remain volatile due to the news related to it.
Technically, an immediate hurdle for Nifty is 17,380 and above this we can see a strong level of 17,600 / 17,800 levels. On the downside, 17,200 is an immediate support, while 17,000 is a strong base for any return.
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