15 hours Ago
Domestic markets are expected to open on a flat note on Thursday amid mixed global cues, as the US Fed kept the rate unchanged. Gift Nifty at 23,140 indicates a flattish opening against Nifty futures Jan close of 23,148 and Nifty Feb value of 23,279. Today being the settlement of derivative contracts, volatility will be higher at individual stock levels.
Besides, the F&O segment will be active ahead of the upcoming Budget, which is already being captured by volatility index - India VIX - that hold above 18 for successive days. Majority of Asian stocks are closed due to a New Year holiday, while Japanese stocks are flat. Most analysts advise investors to sell on this recovery rally.
The Federal Reserve left interest rates in the 4.25-4.50 per cent target range on Wednesday, but its hawkish post-meeting statement hinted at an extended pause in rate cuts.
The market may remain in the sideways to negative zone, said analysts post Fed’s stance. The focus has now shifted to the Budget, as experts believe the Finance Minister will announce measures to boost consumption. According to Mehta Equities, the street is expecting a continued push for economic reforms that have seen India emerge as the world’s fastest-growing major economy.
“We, too, suspect that confidence of the Modi government is expected to roll out and be boldly become visible in upcoming budget on February 1st 2025, under the leadership of Finance Minister Nirmala Sitharaman. India’s FY25 budget is likely to prepare the ground to position India as a formidable alternative to China’s dominance in global supply chains and shall offer a crucial glimpse into the government’s priorities and spending plans. The spotlight will be on the finance minister’ measures to address fiscal stability, inclusive development, infrastructure investment, green growth, and strategic tax adjustments,” it said.
Technical indicators still give a cautious outlook said analysts Osho Krishnan, Sr. Analyst, Technical & Derivatives of - Angel One, said: The Indian equity markets continued its pullback rally consecutively for the second session with developments in Mid and small cap indices. The benchmark index started the day above the 23000 mark and continued its bullish momentum throughout the day, showcasing sustainability at elevated zones.
Eventually the Nifty50 index wrapped the day around 23160, gaining 0.90 percent of gains. “ From a technical perspective, the descending trendline of the ‘Falling Wedge’ pattern has proven to be pivotal, providing a supportive cushion for the benchmark index.
In light of our recent analysis, we have shifted from a bearish viewpoint to a more cautious stance as we approach the upcoming Budget session. Despite this change, a sense of uncertainty continues to loom in the markets; however, the potential for significant downside appears limited,” he added. Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C.
Mehta Investment Interrmediates Ltd. (A Pantomath Group Company), said: “The Indian benchmark index, Nifty, opened with a gap up, maintained buying interest, and settled the day on a positive note at 23,163. However, the broader market outpaced the Nifty, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining by around 2.
31% and 3.32%, respectively. The volatility index, India VIX, rose by 2.
44% to 18.64, indicating increased market volatility.” However, signal from derivative segment indicates a positive outlook, said analysts.
Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities, said: “Derivatives data underscores a bullish undertone, with put writers holding a stronger position than call writers. Open interest at the 24,000-call strike has surged to 1.27 crore contracts, cementing it as a significant resistance level.
“The Put-Call Ratio (PCR) advanced to 1.02 from 0.88, signifying improving sentiment among market participants.
Furthermore, the “max pain” point at 23,200 suggests limited downside potential in the short term, although persistent volatility warrants caution,” he advised. Comments.
