Sensex, Nifty to open on firm note

Benchmarks Sensex and Nifty are likely to see a positive beginning on Friday, amid stability in global markets. After falling for four counsecutive days, the US stocks managed to close on strong note, following jobless claims edged higher.

However, Edward Moya, Senior Market Analyst, The Americas OANDA, said, it looks like this losing streak for stocks will end not because of positive catalysts but on exhaustion from this 5-day losing streak. Jobless claims didn’t really tell us anything new, he said.

Overnight, the major US indices closed in the green with Nasdaq climbing over 1 per cent. Asia-Pacific stocks are also up in early deal on Friday, led by Japan’s Nikkei, which is up by over one per cent. However, others in the region are up marginally.

SGX Nifty at 18,800, signals about a half-a-percentage gains for benchmarks, as Nifty futures on Thursday closed at 18,720.

According to analysts, sector rotations to continue, especially underperformers to see buying activity.

S Ranganathan, Head of Research at LKP securities, said: Markets are seeing time-wise correction and weak global cues are delaying the recovery.

“We feel the consolidation may continue for some time however buoyancy in the banking pack coupled with buying in select index majors may result in a further rebound. Meanwhile, we recommend continuing with stock-specific trading approach and focusing on buying opportunities,” he added.

“With Indices at record highs, investors were seen actively accumulating several state owned banks with vast reach and trust available at reasonable valuations,” he further said.

Kotak Cherry’s view

Srikanth Subramanian, CEO, Kotak Cherry, in an outlook for 2023, said: 2022 has been a volatile year for markets both India and global. 2023 is going to be no exception to that.

With inflation still being one of the key factors to watch out for, it would be interesting to see how things unfold and how swiftly central banks adapt to it. Indian markets have outperformed global peers by a margin. Lot of talks are happening around recession hitting major global economies in 2023.

Key point to note here is if recession hits hard, then India will also face the heat and it will be very difficult for Indian markets to stay decoupled for long. That said, the Indian economy will still be one of the fastest growing large economies in FY23 as well with GDP growth expected to around 6.5-7 per cent, he cautioned.

With the macro uncertainty looming large, one should not be leveraged at these market levels and not be over concentrated in any particular sector. Markets will have phases of correction helped by various global macro headwinds. The markets remain in an overvalued zone and will have to show earnings upgraded to generate better returns at these valuations, he further said.

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