US Fed decision to set the tone for mkts

Buoyed by renewed buying support from FIIs, better than expected corporate earnings, weak global crude oil prices and positive global cues; the stock market resumed its uptrend and went on to post decent gains over the past five sessions. The Indian market erased previous week losses and ended with 2.5 percent gain during the week ended. BSE Sensex added 1,457.38 points or 2.44 percent to close at 61,112.44, while Nifty gained 440.95 points or 2.50 percent to finish at 18,065. Performing in line wwwith the benchmark indices, both the Mid-cap and Small-cap indices rose 2.6 per cent and 2.4 per cent. All the sectoral indices ended in the green. Nifty PSU Bank index outperformed by adding 7.3 percent. Among other indices, Realty was up five per cent, Infra index up by 3.6 per cent and IT was higher by 3.3 per cent. FIIs turned buyers in the week with purchases worth Rs5,395.13 crore. DIIs also bought equities worth Rs1,874.25 crore. In the month of April, FIIs bought equities worth Rs5,711.80 crore and DIIs bought equities worth Rs2,216.57 crore. Indian rupee closed below Rs82 for the week at 81.83 to a dollar. It is pertinent to observe that during the April month, the Sensex rose 3.6 percent and Nifty added four per cent. Smallcap and Midcap indices added seven percent and five percent respectively showcasing exuberance in broader market. Nearly 20 Smallcap stocks added between 40-102 per cent. With the results season underway, stocks continue to react to their Q4FY23 performance.

Near-term direction of the market in the holiday-shortened week would largely depend on the outcome of the US Fed Meeting, the ongoing Q4 earnings season, RIL board meeting for demerger of financial services division, auto sales data, international crude oil prices and other global cues.

Despite an uncertain economic environment, US Fed is expected to raise interest rates by 25 basis points. Results from the big tech companies in US have sparked investors’ hopes that the worst of the post pandemic hangover is fading, but they also show how much growth has slowed. However, the current moment still bears little resemblance, though, to the lofty days of the pandemic that drove tech adoption to new heights. The investigation of Sebi and the Supreme Court-appointed expert committee on the Adani-Hindenburg saga will also keep traders guessing. The markets are closed for May 1 (Monday) is a holiday on account of Maharashtra Day. Listening Post: Don’t Let Other Investors Make Up Your Mind. Imagine an investment that can deliver high returns with barely any risk, almost completely independent of the stock market. Good luck finding that. New research shows that confidence of others can influence your decisions even more than your own experience can. Confidence is contagious. But acting on it can be dangerous. Although it has slipped a bit lately, the Nifty is up almost six per cent since last one month, and surveys show that investors are feeling sharply more optimistic. It’s fine to bask in that good feeling if you wish, but new research shows that the confidence of others can influence your decisions even more than your own experience can. With markets still high, investors need to be even more vigilant than usual against the risk of getting satampeded by other people’s emotions. Research of Neuroscience finds that a particular region in the human brain monitors how positive other people seem to be about their choices. Humans are biologically equipped with the potential to allow more-confident people to have greater sway over our own beliefs. Participants in an experiment guessed whether the next marble drawn from an urn would be red or green. They could rely on the colours of the last few marbles they had picked themselves. They were told they could also take account of what up to four other people were forecasting and how confident the strangers were in those predictions. Naturally, the participants were more likely to predict that the next marble would be red if most of their recent draws from an urn had also been that colour. They were more prone to pick red, however, when they learned that other people had confidently chosen it. Confidence was represented by how fast the other people picked the colour and whether they smiled as they did so.