Domestic markets are likely to open on flat note on Friday. Analysts said Nifty saw a healthy rollovers of open positions to June.

Market experts believe that the June series is also likely to see a positive movement. The solution to the debt ceiling in the US will definitely arrive at right time and that will help the market sustain the rally at global level, they said. Besides, buying by foreign portfolio investors is likely to continue despite valuation concerns. According to them, buying will be in mid-cap and small-cap space.

Among the US benchmarks, the Dow Jones Industrial Average recovered sharply from day’s low to close at 0.11 per cent lower; however, thanks to Nvdia strong rally, Nasdaq jumped 1,71 per cent and S&P 500 closed 0.88 per cent higher.

Wall Street is taking a very short break from debt ceiling angst/Fed tightening and focusing on Nvidia’s AI boom. The Nasdaq is rallying as Nvidia’s outlook bolstered bets that AI will be the key to mega-cap tech’s growth story, said Edward Moya, Senior Market Analysts, The Americas OANDA.  “Most of the morning’s data supported more Fed tightening so traders ignored Fed’s Collin’s comment that a rate pause would give us space to assess actions to date. Debt ceiling drama also eased as Speaker McCarthy stated that some progress was made, though issues remain. Representative Kevin Hern said that a debt ceiling deal is likely by tomorrow afternoon,” he added.

The US debt ceiling uncertainty and a stronger dollar weighed on investor’s sentiments. “Yet again, we saw strong recovery from lower levels indicating overall strength in the market. We continue to expect gradual up-move in the benchmark indices led by support based buying..” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

SGX Nifty at 18420 indicates a flat opening at as Nifty June futures at 18420. Asian stocks are largely positive thanks to a strong rally in the US stocks overnight.

Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, said: “Nifty started off on a weak note before a sensational recovery in the last hour of the day took Nifty above 18300”. 

India VIX

Volatility was clearly evident on the last day of the May expiry series as India VIX made an Intraday low of 8.18 before recovering sharply to close at 12.52. Nifty closed above the 13-day Exponential Moving Average (EMA) on the daily chart, which is a positive sign.

“However, the momentum indicator, Relative Strength Index (RSI) is yet to break its previous high, keeping the lower high formation intact. On the derivative front, the FPIs were seen steadily increasing their short exposure, unlike the April Expiry, where it was the opposite,” he added.

Put-Call Ratio

The Put-Call Ratio (PCR), known as the momentum indicator decreased to 0.97 from 1.22, during the May expiry, indicating call writers’ strength. Traders are advised to be cautious as we head to the June expiry series, he added.