The Foreign Institutional Investors (FIIs) have started 2023 on selling mode and have been aggressive sellers in the cash market for the last few days.
Market participants fear that money may move from India to China as it has been a performing market and some hedge funds and long-only funds do try to chase the performing markets.
Historically India has seen a tough market in January. Data for the last 10-12 years suggests that Indian markets see the biggest volatility in the month of January. In 2021, Nifty corrected by almost 6 percent from January 21 till February 1. In 2022, Nifty made a peak on January 18 and after that the same level came in November 2022.
From a trigger point of view, third-quarter earnings will be a key thing to track.
Dealers are also expecting a few large-block deals in the coming weeks. So that is something to watch out for. However the flows from emerging markets will be very important for the Indian markets starting next week.
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