The Indian equity market is likely to open higher on Thursday, tracking positive cues from the Asian markets. SGX Nifty at around 17,250 indicated a gap-up start for the market.
In terms of global equities, US stocks ended mixed Wednesday as investors reacted to quarterly earnings with the tech-heavy Nasdaq Composite facing pressure, while the Dow extended gains. S&P 500 and Nasdaq 100 futures edged up higher, while equities were trading modestly higher in Japan, South Korea and Australia during the morning trade amid a rally in Treasuries. Oil remained unchanged on Wednesday.
However, volatility is likely to continue in the near term. On the domestic front, investors will look to Q4 earnings and management commentary for cues, as per analysts. According to Mitul Shah, Head Of Research at Reliance Securities, “As the Q4 season is underway, the markets would be closely monitoring earnings and management commentary, for the next few weeks. Moreover, trend in global markets, the movement of rupee against the dollar and crude oil prices will also influence the equity markets in the near term.”
As per S Hariharan, Head - Sales Trading, Emkay Global Financial Services, “As earlier, the macro backdrop remains quite challenging for foreign flows, while valuations do not yet reflect the extent of potential earnings downgrades for FY23, coming up in the next month.”
Nifty trading
From a technical perspective, as per Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, after Wednesday’s pullback rally, Nifty is still trading below its 200-day SMA which is broadly negative.
“On daily charts, Nifty has formed a small inside body bullish candle and on intraday charts. Nifty is consistently taking support near 17,050. The medium-term trend is still on the downside. But the continuation of the pullback rally is not ruled out if Nifty succeeds to trade above 17,050. For traders, 17,050 would act as a trend decider level, above which Nifty could rally up to 17,250-17,350. However, below 17,050 uptrend would be vulnerable. Below the same, chances of hitting the level of 16,950-16,900 would turn bright,” said Chouhan.
Meanwhile, foreign institutional investors (FIIs) continued selling, while inflows from domestic investors continued to provide support to the market.
FIIs net sold shares worth ₹3,009.26 crore, while domestic institutional investors (DIIs) net bought shares worth ₹2,645.82 crore on April 20, as per NSE data.