Sensex, Nifty regain slight momentum but market consolidation continues as year-end triggers remain mute

The Indian benchmark indices regained momentum after opening on a flat note on Monday. The BSE Sensex is trading at 61,610 points, 272 points or 0.44% higher than the previous close of 61,337, while the Nifty-50 is trading at 18,354 points, 85 points or 0.47% higher than the previous close of 18,269 points as of 1:35 PM.

A stock broker reacts to the falling shares in MumbaiCredit: Reuters

Siddhartha Khemka, Head of retail Research, Motilal Oswal Financial Services, said, "Markets are likely to remain in consolidative range due to lack of triggers in the near term. Also, lower participation from institutional investors due to upcoming year-end holidays would keep the markets lackluster. Though investors would keep eye on US home sales and GDP (QoQ) numbers to be released this week."

Commenting on the rising US dollar as a potential trigger for FII selling, Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities, said, "US Dollar once again beginning to ascend against major currencies, including the rupee, any further depreciation in the local currency could trigger further FII selling."

Wall Street stocks tumbled for the 3rd consecutive session as the fed's mission of clamping inflation continues to worry investors. The Dow Jones Industrial Average dropped 281 points or 0.85%, while S&P 500 fell 43 points or 1.1% and the tech-heavy Nasdaq Composite was also down 105 points or 0.97%.

Despite the signs of easing inflation in both developed and emerging market economies (EMEs), the levels remain uncomfortably high for RBI, Fed and other central banks around the world and they are not expected to go easy on the battlefield with inflation. This attitude may aggravate the risk of recession and even the likelihood of recession is enough to trigger a selloff in the market in the near term.