SGX Nifty indicates positive opening for domestic markets

The domestic markets are expected to open on a flat note on Tuesday as uncertainty hits US stocks once again. However, some of the Asian stocks are ruling strong in early deals, giving strength to the bulls. After posting one of the strongest recoveries, US stocks slipped on Monday, with the US dollar rising against major currencies.

SGX Nifty at 18,440 indicates that Indian stocks are expected to open marginally firm as Nifty futures on Monday closed at 18,380. However, stocks in Taiwan, Hong Kong and China are up over 2 per cent, while Japan’s Nikkei, Australia’s ASX and Korea’s Kospi are down marginally.

Edward Moya, Senior Market Analyst, The Americas OANDA, said: US stocks are declining after the latest Fed speak pushes back on the idea that the Fed is almost done hiking and after President Biden and Xi’s first in-person meeting delivered the standard rhetoric about avoiding a cold war. “Obviously, this is just the beginning and the restart of talks between the world’s two largest economies, but it seems unlikely that we will see both sides cooperating anytime soon,” he added.

Inflation cool-off

October CPI inflation has cooled down to a 3-month low. Nish Bhatt, Founder & CEO, Millwood Kane International, said after two months of above 7 per cent inflation, CPI is finally below the 7 per cent mark, but stays above the RBI’s mandate of 6 per cent. Core inflation, too, remains sticky at 6 per cent. The WPI data showed a fall below the 10 per cent mark. This is in line with the central bank guidance for CPI data.

According to Vivek Rathi, Director-Research, Knight Frank India, “Currently, India’s domestic macroeconomic fundamentals are strong compared to its global peers. The sustenance of domestic demand provides enough cushioning for the RBI to continue with its rate hikes to control inflation. In the months ahead, moderation in food prices due to the winter harvest, along with base effect would bring down the inflation print statistically. However, we are wary of price pressure that could emanate from external factors, resulting in a sharp rupee depreciation and effects on the Indian economy.”

Analysts expect the market to remain lacklustre due to the lack of any triggers.

“The market seems to be taking a pause due to a lack of triggers, before resuming its northward direction,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Today will be the last day for Q2-FY23 results and markets could then focus on overall sentiment versus stock specific action, said Deepak Jasani, Head of Retail Research, HDFC Securities.. Nifty could take support from the 18,202-18,259 band, while 18,399 could offer resistance in the near term.

COMMENT NOW