FIIS SELL STOCKS WORTH RS 15K CRORE OVER 3 DAYS: NIKUNJ DALMIA DECODES STRATEGY | EDITOR'S TAKE
ET NOW Editor-in-chief Nikunj Dalmia on Thursday said that there are three near-term concerns for the markets from a global standpoint. For Indian markets, "we have not had anything negative or scary or a new development. We have not heard anything from the US, Europe or any of the global leaders on the situation in Israel. That is the reason why crude is down. That is the reason why you have not seen an ugly spike in volatility. That is the reason why you have not seen anything scary, at least in the commodity market."
"Second is the US macro. Things have changed now... at the start of the year, markets were expecting at least 4 to 5 rate cuts. Now, the markets are talking about maybe two, maximum 3 rate cuts," he said during today's Editor's Take. "That changes the landscape and that is having an impact on the market, global setup and also how FIIs are selling."
"The third point which now I am going to talk is related to FIIs selling. FIIs are net seller in this month so far. They offloaded equities worth Rs 15,000 crore over three days," he said.
India, he said, was supposed to be the "only story which was giving growth, but valuation is expensive or tactically the run-up has been strong". "Maybe you (FIIs) want to come after elections. I don't know what is the real underlying factor. But global macro and FIIs selling, these are two concerns...," he said.
FIIs Selling
Further, he said that "FIIs are selling and and you must recognize that. If they are selling, they are largely going to sell banks, financials, large cap stocks. So it just comes back to that whole point that are they selling because there is something alarming which has happened on the earnings front? The answer to that is No. Has the narrative changed? The answer to that is No. It is just that there seems to be an adjustment at global level for risk and for US Fed and which way flows are likely to move."
"Typically when FIIs sell, they sell banks, they tend to underperform. And that is where I guess the pressure point is. I don't think as of now there is anything which could be called as a near term scare, but the market in a sense are getting completely boxed," he explained.
The Editor-in-chief said that "if you are planning to trade, the strategy that you want is to become a buyer, but you want to be a buyer closer to support level, that's where the panic will get created and that's where we are reaching".
"I think in the near term, you will get a relief rally, you will get a little bit of scare and hopefully towards the second half of the trade, you will see markets giving you a mini intraday bounce. That I expect to happen," he said.
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