Rally In Dollar Could Send Nifty To 7,200: Anil Manghnani
Rising strength in the US dollar could put global stock markets as well as domestic equities under pressure, said Anil Manghnani, director at Modern Shares & Stock Brokers. The Nifty could fall to 7,200-7,300 levels, he added. (Watch)
"Traditionally a strong dollar has been bad for equities... Having corrected from 104 to 93-odd, the dollar index may start to rally again. If that were to happen, then we will have weak equities," Mr Manghnani told NDTV Profit.
The dollar index is a measure of the greenback's strength against a basket of six major global currencies. Earlier, this month, the dollar index fell to an 8-month low on prospects of slower-than-expected rate hike from the US Federal Reserve.
A rise in commodity prices and rallying global stocks also boosted investors' appetite for riskier assets.
Mr Manghnani is also keeping an eye on prices of oil, which is denominated in dollars. A strong dollar also puts downward pressure on commodity prices.
"For crude prices, $44-45 is a problem area. A strong dollar is also bad for oil," he said. In the short term, if the Nifty slides below 7,840-7,825, it could fall to 7,720-7,770 levels, Mr Manghnani said.
Pharma and metal stocks could lead the declines in the first phase in Indian markets, he said. Pharma stocks did not participate in the recent rally, while metals could come under profit-taking pressure after gaining as much as 50-60 per cent, he added.
