‘Santa Claus Rally Appears Unlikely’, Key Nifty & INR Levels in Focus: Experts

By Malvika Gurung

Investing.com — The domestic market has been grappling with market-wide losses on Friday amid a slew of factors including macro US data that boosted prospects of the Fed leading with continued rate hikes for a longer period, along with Covid fears globally.

Benchmark indices tanked 1.26% to 17,898.2 points after sliding to the day’s low at 17,857.1, while fell 1.17% or 709 points at the time of writing. The market volatility barometer surged 4.06%, jumping 6.5% to 16.17 during the session.

In a note provided to Investing.com, Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services stated that US data on consumer confidence, jobless claims, and Q3 GDP numbers surprised on the upside indicating that the Fed’s hawkish monetary stance could continue.

He expects the high market volatility of the past 6 days to continue, with an element of overreaction in the market to the Covid news. Due to strong US economic data, the global market backdrop is likely to continue weak.

“An interesting development in the market is that despite FII and DII buying of Rs 928 and Rs 2206 crores respectively yesterday Nifty corrected by 71 points. This is due to long unwinding in some key index stocks,” Vijayakumar added.

The market expert is of the opinion that investors can pick high-quality stocks in the telecom, banking and capital goods sectors on dips despite a Santa Claus rally appearing unlikely.

On the pair, Kunal Sodhani, Vice President, Global Trading Center, Shinhan Bank expects broader consolidation to continue between 82.6-83.1 levels.

On the Nifty outlook, Anand James of Geojit Financial Services says, “Expect reversal attempts once in the 18,000 vicinity, but inability to scale 18,250 on the bounce should confirm a downtrend aiming at 17,670 initially.”

Read Also: Bears Charge: Nifty Cracks Under 18,000, Sensex Down 600 Pts, VIX Jumps

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