Risk-on or Risk-off?

Risk-on or Risk-off?

Today, the Nifty 50 opened with a gap with down and stayed volatile before closing in the red for the third consecutive day. The main economic event for the week is RBI’s monetary policy committee (MPC) meeting and US inflation rate details on Friday. Is it the right time for Risk-on or Risk-off?

Market participants expect a 40 bps to 50 bps repo rate hike. Similarly, there is also a possibility of a cash reserve ratio (CRR) hike. The MPC’s decision regarding the rate hike is expected tomorrow. In short, it has all boiled down to inflation. Inflation influences interest rates and interest rates determine the market direction.

The Nifty 50 was down 153 points or 0.92 per cent before closing at 16416. Further, it recorded an intraday high of 16487 and a low of 16347. The range between high and low prices was the lowest in the last seven days (NR7). However, Nifty 50 stayed above the 20-day simple moving average.

The market breadth was negative, and the advance-decline ratio was 0.48. Further, the volatility index was up by 1.10 per cent and closed at 20.43. Meanwhile, the FIIs were net sellers today as well.

NIFTY – DAILY MARKET ACTION
Advancers – 694
Decliners – 1432
52Wk High – 17
52Wk Low – 56
High Band Hitters – 58
Low Band Hitters – 63
200d SMA – 17269
50d SMA – 16841
20d SMA – 16251

Top Gainers and Losers

ONGC, NTPC, Coal India, Maruti, and Hero Motors were the top gainers on the Nifty 50, gaining between 1 per cent and 5 per cent.

TOP GAINERS
ONGC +4.84%
NTPC +1.48%
COALINDIA +1.36%
MARUTI +1.35%
HEROMOTOCO +1.00%

Meanwhile, Titan, UPL, Drreddy’s, Britannia, and L&T were the top losers on the Nifty 50, losing between 3 per cent and 4.5 per cent.
View the list of all the Nifty 50 contributors.

TOP LOSERS
TITAN -4.48%
UPL -4.40%
DRREDDY -3.85%
BRITANNIA -3.16%
LT -3.07%

Risk on or Risk off –Sectors & Broader Indices

A majority of sectoral indices closed in the red, except for Nifty Auto and Oil & gas. Maruti and Hero Motors led the gains in the Auto sector.
Likewise, the broader indices followed benchmark indices. Nifty Midcap 50 was down 0.72 per cent, and Small-cap 50 was down 0.52 per cent.

Nifty Sectors – Notable Action
Auto +0.52%
OIL & GAS +0.9%
CONSUMER DURABLES -2.26%
REALTY-1.67%
IT -1.57%

Looking Ahead – Risk on or Risk off

Considering the headline news items of this week relating to the repo rate, CRR and US inflation data, along with rising crude oil prices, the Risk-off appears a safer option.

Daily Pivots

Read our previous -Daily Insights- here
Nifty above 16600. Buy or sell?
Is there any clear trend?
Bulls Indecisive

The Nifty is again back at 16400 levels; the first hurdle or resistance to cross is 16600, followed by the 16700 level. 16500 to 16700 is the Nifty trading range for tomorrow. High volatility is expected throughout the week.

This article is only for educational purposes and is not an investment advice.