Volatile markets are likely to open on a strong note Friday amid condusive global cues. SGX Nifty at 17,460 and firm global markets are likely to keep markets in positive zone, analysts said.
Besides, as the Adani group issue slowly settling down – the Supreme Court appointing committee to look into the Hindenburg report and the group able to raise funds from GQG Partners – the market is likely to focus on fundamentals, they added.
Kunal Vora, Head – India Equity Research, BNP Paribas, in India Strategy report said, “We expect pressure on foreign flows amid Fed tightening and China reopening and on domestic flows from rising term deposit rates.”
According to him, “investors largely agreed with our cautious view on the market and most discussions focused on sectors and stock positioning. While most of the discussions were focused on the near to medium term, investors with long term focus continued to like the India story for the economic and political stability, favorable demographics and likely benefits from supply chain diversification.”
With the macroeconomic numbers remaining robust such as GST collection, decent auto sales figures and reasonably good GDP number – experts believe the market may move in a narrow range with limited downward bias from now on. However, to rally further, market needs fresh trigger, they said.
Overnight, the US markets recovered sharply to ralliy after the Atlanta Federal Reserve President Raphael Bostic said he favored a 25 bps hike and the Fed could be in a position to pause hikes sometime in the summer. Bostic said he favored “slow and steady” as the appropriate course of action for the Fed, as the impact of higher interest rates may only start to be felt in the spring. Market participants believe this stance is dovish and expect less pressure from the rate front.
According to domestic brokerage Choice International, the bread market currently stands on the weaker side. “One should adopt a cautious approach as the key heavyweight stocks are currently skewed on the negative side,” it warned.