Why are markets falling? Key factors driving the downtrend and this week's outlook
Indian stock markets have been on a bumpy ride over the past few months. While there were moments of recovery, the lack of stability has left many investors feeling uncertain and losing confidence. So, what’s really going on? ETMarkets spoke to Kranthi Bathini, Equity Strategist at Wealthmills Securities to decode the current market scene. Excerpts:
Markets have been on a downtrend lately, can you summarize the current market situation?
Kranthi Bathini: We’ve observed a seesaw pattern in the markets recently. After a mild recovery in early January, markets failed to sustain above the 24,000 mark due to several factors:
- FII Outflows: Foreign investors resumed consistent selling post-holidays, putting pressure on Indian equities.
- Global Consolidation: Equity markets globally, including Asia, US, and Europe, are in a consolidation phase.
- Dollar Strength: The dollar’s appreciation signals global liquidity tightening, impacting emerging markets like India.
On the domestic front, the markets remain range-bound, with support around the 200-day moving average at 23,560. The domestic liquidity from DIIs (Domestic Institutional Investors) is acting as a stabilizer. While news flows remain neutral, opportunities exist for long-term investors and traders during dips, provided they operate with a strict stop loss.
Global cues have been mixed, and with Trump’s impending presidency and oath ceremony and the upcoming Union Budget, what factors are affecting Indian markets now?
Kranthi Bathini: The situation is indeed complex,