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Domestic markets are expected open in positive territory despite prevailiing global and domestic uncertainties. According to analysts, today being the last day of financial year 2022 and settlement of monthly F&O contracts on the NSE, markets are expected to witness higher volatility.
FPI behaviour
The moderation in foreign portfolio investors' selling in the last few days is a welcome change, said analysts.
They have pulled out over ₹1 lakh crore in FY22 so far. According to Bank of America Securities India, foreign funds have massively slashed their fresh exposure to the country to $3.7 billion in FY22, also pairing down their holdings in NSE500 companies to 19.9 per cent or worth $582 billion, down from their peak of 21.4 per cent.
Experts believe FPIs will start investing in Indian markets soon as after the massive sell-off in FY22, their selling would be restricted to only a few counters.
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Ruchit Jain, Lead Research, 5paisa.com, said, "Post the recent consolidation phase, our market had shown signs of resumption of uptrend in yesterday’s session and the positive global cues provided impetus for the momentum today."
Ahead of the expiry day, the call writers of 17300 and 17400 strikes had to cover their positions. Now, 17500 strike has decent open interest outstanding, but given that Wednesday’s move was supported by many of the index heavyweights, a sustained move above this hurdle on Thursday morning could lead to short covering, he added.
Mixed global cues
SGX Nifty at 17,600 indicates gap up opening of another 85 points for Nifty, as Nifty futures on Wednesday closed at 17,515.40 in the domestic markets. Equities across Asia-Pacific eked out marginal gains in early deal on Thursday even as the US stocks ended weak overnight.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, “Nifty bulls took control amidst hopes for peace in Ukraine.”
“The ‘impulse risk-on’ was the preferred theme at Dalal Street amidst retreating US bond yields and slipping WTI crude oil prices. The positive takeaway was that the market mood remained relatively upbeat and most importantly the desired follow-through buying was witnessed,” he added.
F&O build up
"We also saw fresh long build-up in Nifty in derivatives segment and technically too, Nifty seems to have resumed its uptrend post the consolidation. Hence, we continue with our advice for traders to trade with a positive bias and look for buying opportunities in intraday declines. The intraday supports for the coming session are placed around 17440 and 17375, while we expect the index to head towards 17600-17640 soon," Ruchit Jain further said.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities, said, Nifty trades around its trend resistance level of 17670. The short term parameters of the markets look positive, but for confirmation of uptrend resumption closing above 17670 remains important. Value is seen in FMCG and select NBFC stocks, while commodities continue to remain volatile, he added
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