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Indian stock markets are expected to open positive on Monday. SGX Nifty at 17,930 indicates a marginal gains at open for domestic indices. With Omicron virus spreading quickly and fear of another clampdown some parts of India at least keep investors on tenterhooks.
However, market experts believe, third quarter result of current fiscal by India Inc is likely to be promising and stocks will react according to their performance.
Most major Asian markets are down in early deal on Monday. Analysts expect markets to see stock specific actions and benchmark indices to swing wildly. The US stocks closed last week in red.
According to Rahul Sharma of Co-owner, Equity 99, there’s a good buying interest in the broader markets as well as many stockS are witnessing good rise in volumes. "The short term trend continues to be positive and hence, we continue with our optimistic stance on the indices," he added.
Prashanth Tapse, Vice President (Research), Mehta Equities, said: "We are witnessing sector wise performance in the market. Investors are advised to keep liquid cash in hand to take advantage of any dips in market considering the increasing Omicron cases in India and across the globe."
Important events this week – Housing Finance and housing companies will be in focus on Tuesday as US will be declaring its Mortgage Market index. Manufacturing companies will be in focus on Wednesday as India will be declaring Its Industrial Production (YoY).
Will FPI buying sustain?
According to experts, the behaviour of foreign investors will be key for sustaining market rally. Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: "FPIs reversed their selling spree during October - December 2021 and bought equity worth ₹4,901 crore for the first four straight sessions in January but they again turned sellers on January 7. A consistent pattern in FPI investment in January is yet to emerge."
A major concern of FPIs is the tightening monetary stance in the US with the 10-year US bond yield rising above 1.7 per cent. Rising bond yields in the US can trigger selling in emerging markets, he added. "Since Indian market is resilient and retail and DII flows are strong FPIs are unlikely to press sales unless the market rises sharply," he further said.
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