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The domestic market is set to open on a flat note as global markets continue to travel in a indecisive path. According to analysts, after heavy selling in the recent months, investors worldwide are confused and await clear signal. "With most of the negative news being discounted, marketmen now waiting for some positive news either on inflation front or from geopolitical scene," a Chennai-based market veteran said.
Commodity prices
A cool-down in commodity prices would give some headroom for global central bankers to concentrate on econmic revival rather than concentrating on inflation, which is at a multi-year high levels for developed nations, he added.
Though crude oil and other crucial commodity prices have moderated, analysts still remain cautious.
BofA Securities, in fact, has further cut Nifty year-end target to 14,500 from 16,000 citing the current headwinds.
The SGX Nifty 15,414 suggests a flat opening for domestic markets as Nifty futures on Wednesday closed at 15,401 on the NSE. Asia-Pacific stocks are littled changed in the early deal on Thursday, except Korean and Taiwan stocks, which slipped about 0.5 per cent. Overnight, the US stocks closed marginally down despite witnessing a smart recovery in early trade.
Recession fears
In addition to tightening monetary conditions across the globe and a slowing economy, including fears of a recession in the US, BofA Securities sees other risks such as likely earnings cut for Nifty in 2Q/3Q FY23 and sustained headwinds from high crude prices. It also noted that Nifty is vulnerable to its 10-year average despite recent correction.
Mohit Nigam, Head - PMS, Hem Securities, said: "Sentiments were also fragile as foreign institutional investors (FIIs) remained net sellers in the capital market."
Investors also trying to analyse Powell’s comments that the “Fed is strongly committed” to bringing down inflation that is running at a 40-year high while policymakers are not trying to cause a recession in the process.”
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said: "The market is currently in a very fragile mode as any signs of negativeness is prompting traders to exit stocks at will."
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