Stock Market: Eyes on US inflation for relief rally after equity rout
By S Jha
New Delhi, March 14: The moderate cooling of the US inflation number has sent the American equity markets on a relief rally, snapping five days of losses. The Indian bourses stay on the sinking course amid the uncertainty over the extent of the contagion impact of the 48-hour collapse of the California-based Silicon Valley Bank (SVB).
The US equity markets were sharply up following cooling of the February inflation number even while the traders continue to keep their fingers crossed on the future trajectory of the US Federal Reserve. The regional banks in the US were trading firmly after sharp losses since the collapse of the SVB. The sharp rebound in the banking stocks has rekindled hopes among the traders that a short-term relief rally could be on the cards even while the largely held view remains that the equity markets have too many challenges in the near future.
Nifty nearly took support from the 17000 level to close at about 17050. Nifty has nosedived from 17850 level to the current position. Bank Nifty has been battered after the banking stocks turned favourites of the bears. But Bank Nifty sharply recoverd from the day’s low of 39132 to close at 39411. Relief rally, if any, is expected to be led by the Bank Nifty, as seen in the US bourses during the Tuesday session.
The Adani group of companies lost their bullish positions, as traders booked profits amid indications that they have now become the favourites of the traders who may keep the scrips in a range. Adani Enterprises led the index fall by tanking over seven per cent, while some its midcaps which had been locked in the upper circuits found themselves dumped to the lower circuits in a change of fortune within 24-hour even while there were no negative news flows available in the public space.
With the indices having sharply tanked in the last few days, the traders are betting on a small tight range, with the likelihood of sell on the rise sentiment remaining on the Dalal Street.
Indian banking institutions are stated to be in strong hand unlike their US peers on account of the regulatory mechanism. Yet, voices are growing loud in India to urge the Reserve Bank of India to pause the rate hikes to allow the economic growth to breathe fresh air.
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