This week the markets started with a bounce due to Maharashtra election results. As we expected it got corrected on Thursday. But, on Friday the market again made a dead cat bounce as the FIIs were said to be inactive on Friday.
This week two important data were released. One was about the US inflation, which indicates delay in rate cuts, and the other one was GDP growth data of India. The data shows that the GDP growth was slowed in the September quarter. Even now the markets are considered slightly overvalued and some experts expect a 5% correction to happen from this levels. So this data on slowdown in India’s GDP, for the past quarter, is expected to have a negative impact on the markets in the comming week.
India VIX is at 14.42. It has fallen by 10.74% this week. As the VIX is still above 10, it indicates that the markets are still uncertain. Many expect the markets to be bottomed but some expect a 5 to 10% correction again from this levels.
The geopolitical tensions have also escalated.
So the overall market trend is negative. Due to the FII inactivity on Friday the markets slightly rose. But if the markets have to reach its previous highs it is impossible without FIIs. If the markets rise without FII activity, then we must be careful. The FII inactivity on Friday was considered due to Black Friday vacation.
In the comming week, we can expect the market to fall [probably] or remain to be flat.