Despite the global stock markets rebounding on Wednesday, Indian stocks are expected to open flat on Thursday. SGX Nifty at 16,660 indicates a gain of 50 points for Nifty as Nifty futures on Wednesday closed at 16,613 on the NSE.

Following a strong close at the US, Asian stocks opened firmly in early deals on Thursday. Equities across Japan, Korea, Australia and New Zealand are up around one per cent. All the three major US indices - Dow, Nasdaq and S&P-500 - jumped 1.5-1.8 per cent on Wednesday.

‘Limited downside’

Even as foreign portfolio investors are selling heavily and despite several headwinds such as inflation pressure, US rate hike and geopolitical war, analysts believe markets will see only a limited downside from here. Most analysts believe that the current fall provides good opportunity for long-term investors.

"If we look at the headline indices then the market was looking very weak but there was some buying in the broader market from lower levels," said Santosh Meena, Swastika Investmart. As of now, news flows related to the Russia-Ukraine crisis and movement in crude oil prices are the key dominating factors for the volatility in the market, he added.

Economic indicators

Economic indicators such as GST collection and firm Manufacturing PMI at 54.9 signal India is better placed economically.

Volatility is expected to remain high in near term given elevated Russia-Ukraine conflict, upcoming State election results as well as US Fed meeting, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services. Further, market would watch out for developments on the Russia-Ukraine talks. If the Russia-Ukraine conflict prolongs and leads to elevated energy prices for longer, it may impact margins and earnings, he added.

Deepak Jasani, Head of Retail Research, HDFC Securities, said, advance-decline ratio is now even suggesting selling is concentrated in large cap stocks. "Nifty has formed a doji but its high low range for the day is within that of the previous session. This reduces the predictive power of a doji which is normally a reversal signal. Soaring energy prices are increasing fears of "stagflation" as oil prices surged past $111 a barrel. 16,482-16,748 could be the band for the Nifty in the near term," he added.

Prashanth Tapse, Vice President (Research), Mehta Equities, said: "We suspect, markets will behave like wild and any weak rebound attempt will again be swept aside by bears at around Nifty’s 17,000-17,150 zone."