Stock Market eyes US jobless data to curb volatility

Spread the love

US jobless data lessens recession fear

By S Jha

New Delhi, August 8: Sensex and Nifty on Thursday swung to extremes amid excessive volatility. The monetary policy meeting outcome of the Reserve Bank of India (RBI) failed to calm the nerves of the street.

Sensex plunged by 581 points to close the day with a deep cut. Nifty too dived by 180 points. Bank Nifty escaped the fear factor with index closing almost flat.

The indices have sharply corrected on the back of deepening fears of recession in the US. Japan stock exchange has cracked. The global cues have been sharply negative this week.

Also Read: Lok Sabha witnesses heated exchanges over Waqf Bill

But the US jobless data may bring respite to the market participants. The weekly jobless claims came in below forecasts as per the Labour Department of the US.

The jobless data came after the market hours in India. The US Futures are higher after the data was released by the Labour Department.

The data suggests that the US economy may not be sinking into recession as has been feared. The extended high-interest rate regime in the US is being blamed for the recession fear.

“First-time filings for jobless benefits came in at 233,000 last week. The figure is down by 17,000 from the previous week,” said the Labour Department of the US. The number is lower than the Dow Jones estimate for 240,000.

Also Read: Vinesh Phogat exits wrestling to knock at leadership

The double whammy of the US recession fear and the Middle East tension knocked down Nifty by over 1000 points. Sensex is now away from the peak by at least 3,000 points.

The sharp dip in the indices has battered the smallcap and the midcap scrips. Some of the high-flying stocks have corrected by almost 20 per cent this week.

The brokerages have been advising clients that Nifty will in a short-term trade in the range of 24000 to 25200. But Nifty had broken the lower range, while staging a comeback afterwards.

Watch: Budget Discussion in Parliament I GST से पहले ही राज्य बीमा पर कर लगा रहे थे: निर्मला सीतारमण I

Nifty closed at 24117 on Thursday. The weekly expiry in the Nifty contract kept the index under pressure.

Bank Nifty showed resilience after the RBI announcement to hold the Repo Rate at 6.75 per cent. It was the ninth consecutive rate hold decision of the RBI. The RBI governor Shaktikant Das has flagged the firm food inflation.

But the HDFC bank and the State Bank of India brought momentum to the Bank Nifty. The two banking behemoths command massive weightage in the Bank Nifty index.

Disclaimer: This article makes no recommendation for buy or sell of shares of any company.

Join the WhatsApp channel of The Raisina Hills