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Domestic markets are expected to remain volatile on Tuesday, amid mixed global cues. US stocks, which began the week on a strong note on Monday, failed to hold on to the gains, and closed lower.
SGX Nifty at 18,150 indicates a flat-to-negative opening for domestic markets, as Nifty futures on Monday closed at 18,173. Asia-Pacific stocks are mixed with Japan, Korea and Taiwan gaining, even as the Australia, Singapore and Hong Kong markets are down in early deals on Tuesday.
Analysts expect the market to remain directionless. Tata Consultancy Services, the first major company to announce results for the Q3 season, reported a mixed performance. While revenues topped most estimates, profits were on the lower side of analysts’ expectations. Besides, for the first time since Q1-FY21, the company reported a fall in net employee headcount at 6,13,974 in Q3FY23, down by 2,197 over the 6,16,171 reported in Q2.
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Tata Motors, Future Lifestyle, Shriram AMC, Safari Industries, DB Realty, Jagatjit Industries, GHCL, Advait InfraThe focus will be on Q3 results and, hence, action will be stock-specific, analysts said. However, the direction of benchmarks depends on foreign portfolio investors’ overall strategy, they added.
According to Ruchit Jain, Lead Research, 5Paisa.com, “If we look at derivatives data, FII’s had about 60 per cent of their positions in index futures on the short side, but they have not formed any fresh shorts in the last two days of the previous week.”
Positivity in the global markets may lead to covering of their existing short positions, he said, and added that call option writers, too, had to cover their positions post the gap-up on Monday, which turned favourable for an upmove.
The market is awaiting Q3-FY23 earnings results for further cues, said Mitul Shah - Head of Research at Reliance Securities. Inflation in the US, Europe and other economies may have peaked out. Meanwhile, central banks across the globe are pushing ahead with the unwinding of their pre-Covid ultra-loose monetary policies, though at a slower pace. While the Indian markets have remained resilient as compared to the global economy, the RBI is expected to continue raising rates in the near term, he added.
Moreover, geopolitical issues involving Russia-Ukraine, China-Taiwan, and a fresh spike in crude oil prices are threatening to upset markets even further, he cautioned.
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