Stock Market: Bulls, bears play see saw; Dow Jones guides swings

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By S Jha

New Delhi, January 6: On Thursday, Dow Jones crashed because of the strong job data. The Indian stock markets tanked, following the US cues. On Friday, Dow Jones rebounded strongly, because of wages not rising enough in the job markets. This is the volatility tale of the equity market in the new-year, which is being anticipated to be extremely volatile.

Dow Jones in the afternoon trade was higher by over two per cent, which if sustained could send the Indian indices soaring on Monday. But the economists concur that the excessive liquidity which was pumped in by the developed nations in the wake of the Covid-19 pandemic outbreak still needs to be sucked to tame the inflation. Thus, the US Fed may not be soon cheering up the equity market participants. But in the meantime the markets are expected to go wild in a see saw battle of the bulls and bears.

The IT stocks were hammered on Friday, with the likes of TCS, Infosys, Tech Mahindra, HCL Technology – all market leaders, which have the US market as their catchments – tanking. The stock market is approaching the quarterly result season and at par performance or below expectations may unleash severe punishment to the IT stocks, which are already down by about 50 per cent from their peaks.

The foreign institutional investors indulged in frenzied shorting of the Indian stocks, selling a net of Rs 2902 crores. The FIIs had dumped Indian equities worth Rs 14000 crores in December. In the new year, the FIIs have not yet positively contributed to the equity markets. While the domestic institutional investors brought in a net of Rs 1083 crores in the equity markets, they were not able to stabilize the indices amid an all-round selloff.

The insurance companies such as SBI Life, HDFC Life were the tiny pack which sought to shrug off the bearish sentiments. Both the scrips are seen to be in a momentum on the positive side. Besides, Reliance Industries, the index heavyweight, saved the indices from an extreme bloodbath on Friday.

The year 2023 is being assessed to be of an extreme economic stress, which has also been stated by the International Monetary Fund. The global GDP growth is projected to come down to 2.8 per cent from 3.2 per cent, with a number of countries slated to witness recession.

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