Benchmarks likely to open positive tracking Asian stocks

K. S. Badri Narayanan | Updated on: Jun 21, 2022

Mid, small-cap stocks may remain under pressure, say analysts

The domestic stock markets are expected open flat on Tuesday, as crude oil prices softened a bit.

According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, “Markets finally heaved a sigh of relief and logged steady gains after early optimism in key European indices prompted selective buying in IT, finance and healthcare stocks. However, the bearish undertone can be seen from the fact that heavy selling continued in metals, oil & gas and capital goods stocks as worries of growth slowdown resulted in a fall in these stocks.

Analysts also said, the pain is in deep markets with small- and mid-cap stocks turning extremely weak. According to them, the trend is likely to continue at least for a couple of days.

SGX Nifty at 15,405 (7.35 am) indicates, a gain of about 50 points for Nifty futures, which on Monday closed at 15,347.65.

Crude down but still at higher levels

Globally as well as domestically equity markets continue to worry over aggressive rate hikes and its impact on economic growth. However, on the positive side, crude prices corrected by 6 per cent, which could provide some breather, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Despite correction, crude oil prices are still at elevated levels, said analysts. While brend crude hovers around $115/dollar a barrel, WTI rules at around $112.

Equities across Asia-Pacific region are up in early deal on Tuesday. Most indices across the region are up over one per cent. US stock futures too edged up on Tuesday.

Volatility to continue

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said: "The short term trend of Nifty continues to be volatile with broader range movement. A decisive move above 15500 levels could open an upside bounce in the market. Important support to be watched around 15200 levels.

"Going ahead, we expect market to remain under pressure with increasing fears of economic slowdown. Given the hawkish commentaries from Central banks and record high inflation, rate hike cycle is likely to continue over the next couple of months and would keep investors jittery," Siddhartha Khemka cautioned.

Published on June 21, 2022
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