Let us analyse BankNifty on 15th Dec 2016. Bank Nifty opened with a huge gap down of around 18143 due to hawkish stance of the Fed regarding the rate hike. The Fed increased the rate hike by 0.25 % which was quite expected by the market. However, for the year 2017 the Fed projected a rate hike 3 times instead of 2, as anticipated by the market.
Also, Fed chairman Janet Yellen was quite hawkish in her tone during the press conference which was taken negatively by the market. Following the downfall in the US market, the Asian market also opened negatively. However, the Indian market recovered most of the losses in the early hours of the trading session making a high near 18500-18520. But, after that the selling pressure appeared due to the strengthening of the dollar. Forming support at around 18300, Bank Nifty traded narrowly in the afternoon session. In fact, in the latter half Bank Nifty traded in a tapered range till the end.
Comparing, with other Asian markets, Indian market were slightly better in digesting the policy stance.
What caused the market up/down?
- Hawkish stance of the Fed regarding further hikes.
- There was also optimism that Fed might change their frequency in the forthcoming meetings.
- There is also some expectation that dollar will begin losing its strength.
- Indian Market is now shifting its focus on the forthcoming budget, remonetisation, digitization, further rate cut by RBI, etc.
For the day, Bank Nifty formed a bearish candle.
Bank Nifty Opening:
Bank Nifty Closing:
High of the Day:
Low of the Day:
Percent Change:
Leave a Reply