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Domestic markets are likely to see a strong bounce back in opening session on Friday, as global markets turned around.
The US stocks are rallying as Wall Street worries over the banking sector are easing after big banks offer support to First Republic and as the SNB gave Credit Suisse a lifeline. “Banking jitters are fading quickly for now and that has everyone scrambling back into risky assets,” said Edward Moya, Senior Market Analyst, The Americas OANDA.
Read also: Major US banks inject $30 bn to rescue First Republic Bank
SGX Nifty at 17,140 (700 am IST) indicates a gap up opening of 100 points for Nifty. However, Asian stocks are up just moderately.
Analysts expect the market to sustain gains throughout the day if there are no fresh crisis. According to them, value buying will emerge in some of the beaten-down large caps helping market sustain the gains.
However, volatility will keep investors confused, they added.
Meanwhile CRISIL, one of the leading global analytics companies, said it expects India’s gross domestic product (GDP) growth to touch 6 per cent in fiscal 2024, compared with 7 per cent estimated by the National Statistical Organisation (NSO) for fiscal 2023. A complex interplay of geopolitical events, stubbornly high inflation — and sharp rate hikes to counter that — have turned the global environment gloomier.
On the domestic front, the peak impact of the rate hikes — 250 basis points since May 2022, which has pushed interest rates above pre-Covid-19 levels — will play out in fiscal 2024, it added.
‘Healthy growth seen’
Amish Mehta, Managing Director and CEO of CRISIL Ltd, said: “India’s medium-term growth prospects are healthier. Over the next five fiscals, we expect GDP to grow at 6.8 per cent annually, driven by capital and productivity increases.”
At present, nearly 9 per cent of the infrastructure and industrial capex are green. “We see this number rising to 15% by fiscal 2027. Down the road, the impact of climate risk mitigation will be felt across revenue, commodity prices, export markets and capital spending,” he added.
Analysts said robust Indian economy and a set of macro numbers are likely to keep markets largely insulated from global events. According to them, once global events stabilise, domestic markets will lead from the front.
However, the current bearish sentiment from foreign portfolio investors is likely hurt the market in the short-term, the cautioned.
Ruchit Jain, Lead Research, 5paisa.com, said the overall trend remains negative but since the FII’s have short heavy positions and the index has approached its multiple support zone around 16,850-16,900. “Traders should look for stock specific action for time being and avoid aggressive trades till the trend reversal confirmation is seen,” he added.
Volume profile indicates Index has a strong support around 16,700-16,800 zone, said Choice International. Coming to the open interest data, on the call side, the highest OI observed at 17,000 followed by 17,100 strike prices while on the put side, the highest OI is at 16,900 strike price, it added.
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