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Volatility to here to stay amid Tariff fatigue


Indian equity benchmarks relatively outperformed the global peers and settled the volatile week at 22400, down 0.5%. Nifty however has spent the week largely in the range of 22400-22600 but significant sectoral churning was the limelight of the week. Significant sell-off seen among Technology names (Nifty IT declining by 4.5%) was compensated by Reliance. However, broader markets have remained under pressure and both mid and small cap indices have declined by nearly 3% each.
What to expect: The lack of follow through strength above last week's high signifies prolonged consolidation in the broader range of 23000-21800 range. In the process, volatility would prevail tracking tariff related development and US Fed meet outcome wherein key support is placed at 21800 levels. However, some respite might be seen in the short term as FTSE rebalancing next week may provide some respite from the ongoing sell-off in the markets.
Beginning of relative outperformance: The ratio chart of Nifty / Dow Jones has recorded breakout from 6 months falling channel, indicating domestic market could relatively outperform the US equities going forward
Global Macros: The cool off in US Dollar index and 10-year bond yield and decline in brent crude oil prices bodes well for emerging markets
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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