Volatility Is The Word

After Fed last week said that it will surely stop the ongoing quantitative easing, there has been a global sell-off in the capital markets and not a single market has shown an contrary view. For the Indian markets this has been more than a shock at it has seen outflow from the bond and equity markets taking a toll on the national currency which nearly kissed 60 against the dollar.

Yesterday too, there has been major sell-off in the international markets. US markets closed in negative with S&P 500 ending with negative 1.21% gains. Nasdaq as well as Dow Jones industrial average turned negative again on the liquidity concerns. The things were not different in Europe as all the three frontline indices crashed by more than 1% each.

In Asia too, the markets opened on a softer note but have come in the positives. There are concerns that the tight liquidity will have impact on economic growth of China. Nikkei has surged 84 points or by 0.64% at this time. Hang Seng is also up 0.5% while Shanghai market due to the concerns on the Chinese economy is down over 1%.

Back on the domestic turf, the FII have been selling all the instruments resulting a heavy capital outflow putting pressure on the currency. Yesterday too the domestic equity tanked more than 1% indicating that the concerns are not yet done. Everybody is left to find the bottom of the markets. Even though there are a few chances that the value investors may find some cheap stocks and may start bottom fishing.

The SGX Nifty is currently trading with gains of 13 points. There could be a flat opening in the Indian markets. The week also would see expiry of the June series and hence volatility is a word for the week.