Sell-Off in Nifty triggered by P-Note Regulation & OI Sell Data
Indian Market Outlook:
The SEBI, in a meeting at 2 pm IST yesterday finalized the KYC norms for the P-Note participants which triggered the selloff of 100 points. FED interest rate most likely to be hiked from 25 bps to 50 bps in the scheduled June 15 FED meeting, further confirmation will come if 3 month US treasury yield trades above 36 bps. Open interest data shows 2 times the average sells in options yesterday.
The open interest data, SEBI's P-Note decision along with FED rate hike expectation in June 15 might put further selling pressure in Nifty. However, the short term trend would be sell only if Small Cap trades below 5090. Nifty is opening 12 points gap up at 7790 from yesterday's close of 7778 at 8:15 am IST.
International Market Outlook
The greenback, still 3 percent lower on the year, has risen this week against most currencies after Fed officials said in their meeting minutes that they could raise rates as early as June. New York Fed President William Dudley reaffirmed that view Thursday when he said the Fed could hike rates in June or July if economic data improves as expected. Brexit, or the British vote on whether to remain in the European Union, is one reason economists think the Fed could put off its rate hike until after June. The Brexit vote is June 23, about a week after the Fed meets.