Domestic markets are expected to open Friday on a flat note amid mixed global cues. Analysts expect the market to remain volatile as investors are still confused. US stocks that opened on a strong note on Thursday, turned weak intra-day, before recovering to close in the green, still far off the day’s peak level.
Edward Moya, Senior Market Analyst, The Americas OANDA, “The post-Fed sell-off came from Yellen’s comment that they haven’t looked at backing all bank deposits with FDIC insurance. This was bad news for the banks and contagion fears.”
Yellen’s comment at a Senate panel hearing should be taken with a grain of salt, given a decision to back all deposits would need Congressional support, he said, adding “Optimism should remain that authorities will do their best to avoid further banking contagion and any systemic risks”.
Meanwhile, Nifty futures at the Singapore Stock Exchange are hovering around 17,100, against the Nifty March futures closing of 17,087 and April futures closing of 17,186. This signals that domestic markets are awaiting further clarity to take clear direction.
According to analysts, though most of the negatives are discounted, there are no fresh positive triggers to lift the market. Until some clear positive trigger emerges, markets are likely to see narrow movement with a downward bias, they added.
Stuck in a band
The US Fed did little to provide concrete direction to the market, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd. “Their resolve to control inflation remains strong despite the ongoing banking turmoil,” he said, adding “overall, we expect Indian markets to remain range-bound due to a lack of triggers. The global environment continues to remain volatile. FIIs, too, have been consistent sellers for the last few days, which could keep the market under pressure.”
According to Choice International, the volume profile indicates the index has strong support around the 16,850-16,750 zone. Coming to the open interest data, on the call side, the highest OI was observed at 17,200, followed by 17,500 strike prices, while on the put side, the strike price was at 17,000.
Nifty could not build on to its two-day gains. The 17,200-17,225 level is proving to be a tough resistance, said Deepak Jasani, Head of Retail Research, HDFC Securities. “On falls, 16,985 could provide support. If Nifty does not resume the uptrend by tomorrow, the short-term top would have been made at 17,207,” he added.