Domestic equities are expected to open on a weak-to-flat note on Wednesday. Profit taking amid valuation concerns will keep domestic markets under pressure, said analysts.

Asian stocks are mixed ahead of key inflation data in the US, which will give some cues about Federal Reserve’s next steps on inflation rate. Australian shares edged higher even as Japanese stocks are down.

Despite stiff valuation, Indian stocks will continue the gaining momentum, say analysts.

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Rakesh Parekh, MD & Co-Head, Portfolio Management Services, JM Financial Ltd, said, “Indian markets have crossed all-time highs on continued optimism regarding good earnings growth and a strong economy.”

“We continue to remain highly positive on the continued outlook for the Indian economy and markets, and expect the momentum to continue with more vigour for the remainder of 2024, especially post the anticipated return of the present government in June,” Parekh added.

According to Arvinder Singh Nanda, Senior Vice President, Master Capital Services, the anticipated corporate earnings have been a driving force behind the recent market momentum.

Gift Nifty at 22,650 (against Nifty futures close of 22,735) indicates a negative start for domestic markets. But, analysts say profit taking will emerge in the later part of the day.

Besides, trading holiday due to Ramadan on Thursday will keep participation low, they added.

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“Despite notable increases in the prices of gold, crude oil, and metals, investors are witnessing an upward trend in equity markets, and there are expectations of a Federal Reserve rate cut. Investors may consider locking in partial profits while keeping a hold approach,” Nanda said.

Government policies and reforms have played a crucial role in fostering a stable environment conducive to market growth. Measures aimed at stimulating the economy, coupled with a focus on digitalisation and infrastructure development, have attracted substantial investments. The growing involvement of retail investors, combined with sustained interest from foreign institutional investors, highlights the widespread confidence in India’s growth story, analysts said.