Equity markets have shown signs of recovery after experiencing their worst weekly decline since June 2022. This recovery comes in light of positive US inflation data and a positive trend in Asian markets. The Sensex and Nifty have opened higher today, with both indices showing gains in early trading.
Last week, the Nifty witnessed a significant decline of 4.77%, marking its worst weekly performance in a long time. The sell-off was fueled by heavy selling from foreign institutional investors (FIIs), causing the benchmark indices to slip below their 200-day moving averages. However, with the positive start to this week, there is hope for a rebound in the markets.
Sector-wise, pharmaceuticals emerged as the top performer last week, while metal and banking stocks faced sharp corrections. The volatility index (India VIX) also rose, indicating ongoing market uncertainty.
Market experts are cautious about the rebound, noting that the market may face resistance ahead. They advise traders to remain selective and watch for key levels to confirm a sustained upward trend.
The positive opening today follows encouraging US data, including a lower-than-expected inflation gauge. The strength of the US economy, robust corporate earnings, and other favorable factors are providing support to global markets.
In the Indian market, sectors like hotels, real estate, and IT are expected to perform well in the coming days. Strong advance tax collections signal robust Q3 results, and there is optimism about potential interest rate cuts by the RBI in the future.
Overall, while global markets are providing support, caution is advised for short-term traders due to the risk of being trapped at lower levels. It will be important to monitor key levels and market trends to navigate the current market conditions successfully.
