Massive sell-off in US market: Anil Singhvi decodes factors that forced Dow Jones to close with over 1000 points cut; suggests sectors to focus

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In a special edition of Editor’s Take, Zee Business Managing Editor Anil Singhvi explained the massive weakness in the US markets on Wednesday and suggested the sectors to keep in focus, while seeing the volatility in the market, which is likely to continue as per the Market Guru. 

The US markets witnessed a volatile day on Thursday as Dow Jones slipped over 3 per cent of 1000 points, followed by S&P down over 3.5 per cent at the close. While Nasdaq slumped almost 5 per cent on Thursday, entering a bear market, it tumbled over 24 per cent from its high.  

After US Fed meeting on Wednesday, the situation was supposed to be normal, according to Singhvi. “The US indices grew by 1000 points, however, couldn’t hold on to the level during Thursday session and erased almost all their gains.” 

Stating that both the buyer and seller are trading aggressively, Singhvi mentioned that there is big reason for US markets to fall, and when decoded, it mainly fell due to the same reason, as it rose on Wednesday – US Fed decision. 

On Wednesday, the US market grew on US Fed Chair Powell’s commentary that Fed will increase only 0.5 per cent going forward and not more than, which was comforting, Singhvi said, adding further that the realization was hit during Thursday’s session as half a per cent interest rates won’t control inflation and should be hiked more. 

Another view suggests the market is fragile, Singhvi also noted. He said that the mood of the market cannot be read, and this is the same in both India and US. He further suggested, “Not to keep an overnight position – be cautious, let global markets settle.” 

Reiterating bearish stance on IT and Metal stocks, Singhvi said, “They should be sold on rise, and the view will change only when a stimulus package comes from China, and correction of 10-15 per cent or more is visible, besides, it can also change if Russia-Ukraine crisis is completely off.” 

The managing editor has turned his stance on banks to Neutral from Bullish post the RBI rate hike announcement, while he is still bullish on Autos and suggested to buy on dips.