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Domestic markets are expected to sustain the gains in early trade on Thursday, signals Gift Nifty. Strong Asia-Pacific markets add strength to the bullish trend.
Analysts expect large-cap to shine, though mid and small-cap may come under pressure due to valuation.
Gift Nifty at 20178 indicates a flat to positive opening for Nifty, as Nifty futures on Wednesday closed at 20,125.
Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services Ltd, said: Overall, the sentiments got boosted post the release of domestic retail inflation, which fell to a 2-month low of 6.8% while July IIP growth surged to a 5-month high. “Overall, we would suggest investors to shift their focus from mid and small caps to large caps in the near term, as the risk-reward is favourable over there,” he added.
According to Suman Chowdhury, Chief Economist & Head – Acuité Research, “Our latest heat map indicates that after a strong performance in Q1, the global headwinds and the freshly emerging domestic headwinds have started to impact the economic momentum in Q2.”
With the spectre of El Nino and a deficient monsoon hanging over the macro landscape, the economy has already seen a bout of high vegetable prices and increased cereals and pulses prices. While the government has already taken and is expected to take additional steps to temper food prices, the sharp rise in global crude prices over the last few weeks is an additional risk factor, he said.
“ Beyond inflation, the impact of uncertain rainfall is also reflected in fertiliser production as well as tractor sales and can pull back rural consumption. With a sustained high credit growth and expectation of a pickup in private sector capex, we, however, remain cautiously optimistic with a GDP growth forecast of 6.0% for FY24,” he added.
India VIX, fear gauge, moved up marginally to 11.82.
“Index has a support around 19950-19900 zone. Coming to the open interest data, on the call side, the highest OI observed at 20100 followed by 20200 strike prices while on the put side, the highest OI is at 20000 strike price. On the other hand, Bank nifty has support at 45300-45500 while resistance is placed at 46200-46300 levels,” said Deven Mehata, Equity Research Analyst, Choice Broking
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