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Domestic markets are expected to open flat with a positive bias amid mixed global cues.
Analysts expect the market to move in a narrow range, as there is no clear trigger for the equities to take a directional call.
With Q3 corporate results around the corner and the Budget ahead, analysts expect the market piggyback global sentiment. However, heavy selling by foreign portfolio investors is a cause for concern, they added.
SGX Nifty at 18,150 indicates a soft opening for Nifty, as Nifty50 futures on Wednesday closed at 18,103. Asian stocks are positive as the US stocks closed in the green despite US Fed’s confused signal.
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Craig Erlam, Senior Market Analyst, UK & EMEA, OANDA, said, Equity markets are pushing higher on Wednesday, buoyed by softer yields and some promising PMI revisions in Europe.
The US Federal Reserve minutes from its December meeting showed officials highlighted the need to curb inflation without impacting the economy too much.
“It would appear investors are increasingly coming around to the idea that Central banks will be forced into cutting rates earlier than previously anticipated to support the economy. That would also suggest they anticipate inflation will subside faster than previously thought which would be welcome if true after a year of overshoots,” he added.
Domestic market outlook
Besides, global factors, analysts expect the domestic market remains under pressure in the short-term as foreign portfolio investments(FPIs) increased their sales.
According to provisional data provided by exchanges, FPIs sold shares worth ₹2,620 crore. However, support from domestic institutions and retail investors will help the market stay afloat, they added.
Rising interest rates, the Russia-Ukraine crisis, and the spread of the Covid-19 cases in China are also pressuring the market, said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd. But still, our domestic market is showing strength as compared to the global market ahead of the Union Budget and Q4 earnings, he said.
Gour added, “The market focus has shifted to a budget-related theme amid global volatility, where infrastructure, capital goods, and rural sector-related themes may continue to do well. Apart from that, the insurance sector is also gaining traction.”
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