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Stock markets are likely to open flat-to-negative on Tuesday. SGX Nifty is currently ruling at 17,880 against the spot close of 17,862.25 (Feb futures) and 17,972.35 (March futures).
Analysts expect the market to remain volatilie ahead of F&O (February contracts) expiry on Thursday.
Awaiting Fed cues
Vinod Nair, Head of Research at Geojit Financial Services, said: Stocks are getting beaten ahead of the release of Fed minutes on Wednesday. Maintaining its guard against inflation, the Fed is expected to remain hawkish.
“As expected, it is unlikely to have a dire effect on the global stock markets. However, the consequence of constant high interest rates is a slowdown in demand and the earnings outlook, hence the near-term trend will be cautious,” he added.
Analysts said the focus is on the banking and finance counters, which have been under pressure.
Ajit Mishra, VP - Technical Research, Religare Broking Ltd, said the underperformance of the banking and financial majors is weighing on sentiment in the absence of any major event.
“And, indicators point to more pain in banking, though resilience in the IT, auto and select FMCG heavyweights may cap the damage. Besides, the upcoming monthly expiry of the February month derivatives contract would add to the choppiness,” he added.
Asian stocks were mixed in early deals on Tuesday, but largely in the positive zone.
Technically also, the market appears weak, said market experts.
Technical indicators suggest a weak market
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said: Technically, a bearish candle on the daily charts indicates further weakness from the current levels. “However, the Nifty is trading near the 20-day SMA and the Sensex is near the important support level of 60,600. If the index succeeds in trading above 17,900, a quick pull-back rally is not ruled out. Above which, it could move up to 18,000-18,125,” he said.
On the flip side, a fresh sell-off is possible only after the dismissal of 17,800 and below the same, the index could slip till 17,730-17,700,” he cautioned.
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