6 Dec 2016

Nifty moves sideways

The dollar and US equities continued to draw global liquidity, while overseas markets were trying to interpret the policy direction of a Trump government from his cabinet appointments. In the meantime, India continues to adapt to the 'demonetization' of the most common currency notes in circulation. The Nifty 50 moved sideways over the past couple of weeks, adding 13 points to close at 8087 after trading in a range of 4.2%. Investment flows are still dominated by the draw from the US as foreign portfolio investors were net sellers of $1.1bn in cash equity. Strong mutual fund inflows saw domestic institutions buying an equivalent amount. Volatility was a notable feature, the India VIX spiking sharply up from its opening at 18 to a high of 23 before settling back into the high teens, closing where it opened. Breadth was even, with advances and declines in balance. Index futures closed at a premium of 1.2% to cash.

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