Nifty likely to open higher amid positive global cues

Indian bourses to sustain the recovery that was witnessed on Monday's post noon session. Cooling off crude oil prices triggered positive waves across global equities, said analysts. However, this week being the settlement of monthly derivative contracts, experts expect the market to witness volatility.

Global markets are positive as investors monitor developments in the war between Ukraine and Russia, with peace talks set to take place in Turkey this week. While oil prices were down on fears of reduced demand from China, a surge in Covid-19 cases instigated a two-stage lockdown in Shanghai, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Domestic market has entered a consolidation phase with key benchmark Nifty stuck within 17,000-17300 range, he said, adding "despite challenges like escalating inflation concerns, elevated commodity prices (including crude oil), ongoing Russia-Ukraine conflict and heavy FII selling, markets have remained resilient for now. A move beyond this range on either direction could set the market course for the near term."

Global markets up

SGX Nifty at 17,441 against Monday's Nifty futures close of 17,268.95, indicates close to a 180 points higher opening for Nifty. Equities across Asia-Pacific region are up between 0.3-0.7 per cent in early deal on Tuesday, signalling bullish undertone across the region.

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Overnight, the US stocks, which opened negative on Monday, bounced back with tech-heavy Nasdaq closing 1.31 per cent higher. Dow Jones and S&P-500 gained 0.27 per cent and 0.7 per cent respectively.

"While the heavyweights are mostly sideways, there has been some momentum in the broader market, Khemka further said.

F&O signal

According to derivative experts, the market is in consolidation phase. Ruchit Jain, Lead Research, 5paisa.com, said, " Recently, our markets have seen a consolidation phase, which we usually call time-wise correction. 17000-16950 is the support range of this consolidation as the index has witnessed buying interest in this range. It was the earlier resistance zone, which is now acting as a support on declines."

Also, in the options segment, the put writers have decent open interest outstanding in 17,000 strike which makes this support more prominent. Hence, we witnessed buying interest as the index approached the 17,000-mark, he added.

"The Bank Nifty index which has seen some price wise correction in last few sessions has retraced 38.2 per cent of its previous up move, which was around 35000 and the index witnessed recovery from that support. Hence, today’s low of 17000 in Nifty and 35000 in Bank Nifty will be seen as a sacrosanct and till these supports are intact, one should avoid forming short positions," he further said.

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