The new week to begin on positive note for domestic markets. However, analysts expect the market to remain volatile and will be anchored by global events.
Gift Nifty at 22,686 signals a gap-up opening of over 120 points as Nifty futures in domestic market closed at 22,575.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “According to NSDL data, in the two days of trading in May, FPIs have invested ₹1,156 crore in equity and sold ₹1,726 crore in debt.”
Throughout last week, the key benchmark indices Nifty and Sensex maintained a flat trajectory, marking the fourth consecutive week of little movement. At the close of trading, the Sensex recorded a marginal uptick of 147.99 points, or 0.20 per cent, reaching 73,878.15, while the Nifty edged up by 55 points, or 0.25 per cent, to settle at 22,475.80.
Overall, the sector-wise performance was positive, with notable gains observed in PSU banks, metals, and pharma sectors. Conversely, the IT and media sectors experienced selling pressure over the week.
“The rising VIX is indicative of potential volatility. Market can turn highly volatile in the short-run. Fed’s decision indicates rate cuts much lower-than-expected earlier this year. Inflation has turned stubborn at lower levels. But the latest jobs data in the US indicates a slowing economy and, therefore, rate cuts may be necessitated. The wage increase falling below 4 per cent also reflects a weakening labour market. From the stock market’s perspective this is good news. That’s why the US markets rallied sharply on Friday,” Vijayakumar added.
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According to Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd, Global markets are currently in a good mood after strong earnings from tech stocks, with the Dow Jones up 1.14 per cent and Nasdaq up 0.97 per cent in the first week of May 2024. The US 10-year bond yields and the dollar index are also cooling off, giving strength to the market. Economic data releases from China and the US, along with movements in the global currency market, will also be factors to consider.
Asian stocks are up in early deal led by Australia, China and Taiwan.
According to Arvinder Singh Nanda, Senior Vice President at Master Capital Services,the Nifty 50 has demonstrated resilience around the 22,300 level, suggesting a potential upward trajectory towards the 22,700-22,800 levels. However, a break below 22,300 could lead to a downward movement towards the 22,000 level.