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Domestic equities are expected open flat on Tuesday amid mixed global cues. Though equities across the Asia-Pacific are up in early deals, US stocks ended mixed overnight. While the Dow Jones Industrial ended positive, the tech-heavy Nasdaq slumped over 1 per cent.
SGX Nifty at 15,882 indicates that domestic stocks are likely to open flat but in positive territory, as the Nifty futures closed at 15,842 on Monday.
Inflationary pressure
A further surge in commodities, especially crude oil prices, is likely to add pressure on emerging markets such as India. According to analysts, global trends are likely to dictate near-term trends.
Milind Muchhala, Executive Director, Julius Baer India said: "The Indian equity markets, in line with the global equity markets, seem to be in the midst of a perfect storm, displaying an extremely high level of volatility. The concerns that have been weighing on the markets since the start of the year related to inflationary pressure and tightening by the global central banks, seem to have got exacerbated in the past couple of months, especially with the long-drawn geopolitical crisis and the fresh wave of Covid-19 in China, which has further disrupted supply-chains."
Global headwinds
According to Ajit Mishra, VP-Research, Religare Broking, "Global headwinds currently weighon sentiment and domestic factors are also not very encouraging. Fresh selling pressure in the banking pack is adding to the negativity. We, thus, reiterate our negative view and suggest continuing with the “sell on the rise” approach. Since most sectors are reeling under pressure, participants should align their positions accordingly and avoid contrarian bets."
Muchhala further added: "We have been cautious on the markets for some time and we expect uncertainty and volatility to continue in the near term. In fact, over the past few days, all intra-day recoveries have been sold off, and various technical levels are being broken, making the markets more nervous."
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