Domestic markets are expected open weak with minor losses on Tuesday, but analysts see support to emerge at bottom level. According to experts, the market will try to recover in the later part of the day after declining sharply for successive days. They believe bottom fishing to happen sooner, as some funds are keen to deploy cash as the valuation appears 'right'.

Inflationary pressure

However, rising crude oil and other essential commodity prices will put a spoke on the recovery, as they will affect India Inc's topline and bottomline more.

Vinod Nair, Head of Research at Geojit Financial Services, said, “Inflationary pressure is also witnessed in other commodities like gold, aluminium, copper, etc. which will eventually eat away corporate profits in the coming quarters.”

SGX Nifty at 15,780 signals a gap down opening of about 100 points, as Nifty futures on Monday closed at 15,872. Asia-Pacific markets are down by about half a per cent in early deal on Tuesday. Overnight, the US stocks maintained their falling by over 3 per cent.

Market may remain volatile due to the Russia-Ukraine crisis. Trend in global equities, the movement of rupee against the dollar and crude oil prices will dictate trend in the near term, said Mitul Shah, Head of Research at Reliance Securities.

Oil and IT sector to benefit

Analysts see rising crude oil prices and weakening rupee against dollar are likely to benefit information technology and oil and gas sector stocks.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Service, said, “Given the sharp rise in oil and commodity prices, stocks from this space are witnessing strong momentum which is likely to continue in the near term as well. Also IT is in focus with depreciating rupee and is a safe haven. FIIs continue to remain heavy sellers in India with global risk-off sentiment. Hence large FII holding sectors like banking are seeing consistent selling pressure.”

However, according to Shah, the Indian economy is in good shape given the underlying stellar corporate earnings momentum, the cleansed balance sheets, improving asset quality of the banks, levers in place for capex cycle revival and credit off-take, probable manufacturing resurgence given PLI and other government reforms. "This coupled with increasing DII participation can boost the markets to new heights once prevailing clouds of uncertainty disappear," he added.

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