The new week is likely to open on a positive note for domestic markets. SGX Nifty at 18,160 indicates a gap-up opening of about 40 points. After a gap of nearly a week, all stock markets are opened in the Asia-Pacific region. Most equities across the region are up, though Japan and Singapore benchmarks are down in early deal on Monday.

Analysts expect consolidation to continue in the domestic market. However, volatility emerged in the global market due to the FED’s concerns over elevated inflation despite softening its language on future rate hikes and the ECB’s hawkish policy action.

“We expect continued foreign inflows and favourable domestic macroeconomic conditions to protect the downside,” said Vinod Nair, Head of Research at Geojit Financial services.

They expect the action in small-cap and mid-cap space, which according to them, may outperform the main benchmarks in the short-term.

The ongoing earning season will continue to remain in focus. Most companies, that have announced results so far, have either met or slightly beat Street expectations, said analysts. 

A study done to brokerage Motilal Oswal Financial said: “The 4QFY23 aggregate earnings of the 78 MOFSL Universe companies have been in line with our estimates and risen 8 per cent YoY (v/s est. +3 per cent YoY). “This aggregate performance has been led by BFSI and Automobiles that reported 28 per cent/9 per cent earnings growth (in line), while it has been dragged by weaker-than- expected performance of Metals that clocked 67 per cent earnings decline (Tata Steel’s profit plunging 83 per cent YoY),” it said adding that “excluding Metals and O&G, the MOFSL Universe and Nifty have posted a solid 20 per cent and 22 per cent earnings growth (v/s expectations of 19 per cent and 21 per cent), respectively, fuelled by BFSI and Automobiles. 

However, analysts caution investors that profit booking may keep market in a range.

Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, said derivative data suggests further profit booking in the index as cumulative open interest in the call side recorded at 10.8 crore against 6.8 crore on the put side, bringing OI PCR at 0.64 for weekly expiry. Maximum call open interest was at 18200 and then 18300. On the put side, the highest open interest placement was at 18000 followed by 17900. Nifty future witnessed a short build-up on Friday, adding 4.43 per cent open interest after falling 0.90 per cent.