Nifty 50 Index: The benchmark indices have been negative in the calendar year and have moved below their 50-day moving average (DMA) on February 7. Nifty 50 and BSE Sensex have slipped below the highs they set on the day of Union Budget, 2022-23 last week, indicating weakness in sentiment among investors.
The Nifty 50 index was down 228 points or 1.3 per cent at 17,301 (around 12 noon), while the BSE Sensex is trading 656.8 points down at 57,988.
Anand James, Chief Market Strategist, Geojit Financial Services said, “For upside confidence it (Nifty 50) needs to break 17,580 level, but we need to watch 17,420-380 level before trading “
Let’s take a look at 4 factors that weaken the sentiment of Dalal Street-
Globally, the rally in crude oil is not showing any signs of stopping. In this sequence, today Brent reached the level of $ 94 per barrel in the Asian market. Its price has climbed more than 14 percent in the last one month and it can go up to $100 in the coming weeks. The strength in crude is negative for the Indian economy, as it affects consumer demand and increases pressure on the Reserve Bank of India to tighten monetary policy.
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US payroll data shows that jobs increased by 4,67,000 last month, which could help the central bank raise rates. This figure is also important because this month the Omicron variant was very affected. Also, this figure of jobs was much better than the estimates of economists. Traders are therefore betting on the US Fed raising interest rates five times this year, including the possibility of a 50 basis point hike at its March monetary policy meeting.
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Similar to the rally in global crude prices, selling pressure from foreign portfolio investors continues. So far in 2022, foreign investors have sold Rs 37,000 crore in the domestic market. Expectations of rate hikes in the US and higher valuation of the Indian stock market compared to other emerging markets are also forcing FIIs to sell.
Last year, the main reason for the rally in the domestic market was the companies in the information technology sector. Now in 2022, this sector has lost its sheen and Nifty IT index is trading with a decline of more than 10 per cent as compared to the recent high. Selling by foreign investors as well as selling in global technology stocks has hit the sector double.
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