Markets behaved on expected lines, after rising they corrected. The correction that happened on Friday was sharp and that changed the sentiment on the street. Events in the US seem to be shaking global markets. BSESENSEX lost 220.86 points or 0.61% to close at 35,742.07 points. NIFTY lost 51.45 points or 0.48% to close at 10,754 points.
US Fed raised interest rates to trade in the range of 2-2.25% and indicated that there would be two more rate hikes in the calendar year 2019. Markets did not like the hike and reacted sharply. Crude oil fell below 55 dollars and, in the process, made a 17-month low. A strong dollar was enough for the bears to maul the oil bulls and in the process they did so similarly also in the equity markets. Dow Jones cracked and lost 1,655.14 points or 6.87% to close at 22,445.37 points.
The Indian Rupee appreciated Rs 1.75 or 2.43% to close at Rs 70.15 to the dollar. While the fall in crude prices is great news for India, the fall in equity markets and Dow may not. In any case it is believed that 2019 may not be a great year for the US equity markets in any case. Even in India the possibility of 2019 being a tough and volatile year for equities in lieu of the upcoming elections could be a reality.
The intra-week high on the BSESENSEX was 36,554 and there was a sharp fall on Friday which did the damage. Similarly on NIFTY the intra-week high was 10,985. Looking from the high the fall is 800 points on the BSESENSEX and 230 points on NIFTY. Nothing to big but the only concern is the fall that happened on Friday.
The week ahead sees December futures expire on Thursday the 27th. The current value of NIFTY at 10,754, is down 104.70 points or 0.96%. With there being a holiday on Christmas for the markets, it means that there are three days for expiry. While the difference is insignificant, and the series could go either way, the possibility of markets rising from here on, looks likely as Dow has fallen quite sharply in the last 10 days or so. With a mere four trading days to go before 2018 calendar year ends, expect sharp volatility to be there on low volumes. Dow Jones on a year to date basis is down 9.20% and is trading virtually at the year’s low. Indian markets have fared much better and the benchmark indices continue to trade positively with BSESENSEX up 4.72% for the year and NIFTY up 2.08%.
Post the election results where the ruling BJP lost three Hindu heartland states, GST rates in the 28% tax slab have been tinkered and six items have seen rates being reduced. With this reduction a mere 28 items remain in the category which has luxury and sin goods. With just under five months to go for elections the government is likely to do course correction to take care of certain issues seen as affecting the party’s supporters and votes.
The markets will be volatile on low volumes in the last four trading sessions before the year comes to an end. Refrain from any reckless trading and use any sharp dips to buy and strong rallies to sell.
