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Quote on Morning Market 12 January 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The US inflation data expected tonight will be market moving. If the December inflation data declines to 6.5% as the market expects with a 0.1% decline on a monthly basis, that can lead to the Fed downshifting its rate hiking with a 25 bp hike in February and then pausing. This can trigger a rally in equity markets. On the other hand, if inflation remains high, there can be a market sell off.  So watch out for this crucial data.
In India, FIIs continued their selling spree for the 14th straight session taking the cumulative selling to Rs 19795 crores, dragging the market down.
An important lesson from market experience in 2022 is that despite FII selling of Rs 146048 crores Nifty went up by 4.3 %. Therefore, even though FII selling can have a short term impact, that is unlikely to last. If incoming economic data turns out positive, domestic investors can trump FIIs like in 2022.

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