SGX Nifty indicates a positive start for Indian stocks on Friday, though the global markets send mixed signals. Analysts expect the market to remain in a narrow range amid a mixed-result season.
Eyes on RBI meet
Amidst this, the RBI’s unscheduled meeting on November 3 will be in focus.
After the 190-basis points hike in the Repo rate in the last six months, the RBI’s Monetary Policy Committee (MPC) will meet on November 3 to discuss the report to be submitted to the government on its failure to meet the inflation target for three quarters in a row.
A report by World Bank has revealed that though global energy prices are expected to ease in the next two years, but they may remain "remain considerably" higher than the historical average.
“In the report, RBI will write why they have missed the inflation target and what they plan to do. The reasons the RBI could mention for missing the inflation target for three consecutive quarters are higher global commodity prices, weak currency due to flight to safety and increase in food inflation because of adverse weather situations,” said D K Pant, Chief Economist, India Ratings and Research.
SGX Nifty is currently ruling firm at 17,830 (7.15 am), signalling a gain of at least over 100 points for Nifty. However, most Asia-Pacific stocks are down in early deals on Friday except a few such as Korea, New Zeland and Singapore. However, Japan, China, Australia and Taiwan markets are down. Overnight, the US stocks closed on a mixed tone, with broader S&P 500 and Nasdaq indices ending lower while Dow Jones Industrial Average managed to close in the green.
US tech stocks suffer
Nasdaq tumbled as the US tech companies disappointed on the result front.
Edward Moya, Senior Market Analyst, The Americas OANDA, said: "Mixed mega-cap tech earnings won’t provide Asia with a boost. A lot went wrong for big-tech today; Apple’s holiday outlook underwhelmed, inflation pain is more noticeable, and unfavorable exchange rates will hurt future sales. The news was not all terrible for Intel shares after posting solid results alongside the announcement of a cost-cutting plan that will save $10 billion by the end of 2028,"
The key theme across this round of mega-cap results is that an earnings slump is here as inflation cripples an already weak consumer, he added.
Despite global uncertainty, analysts expect domestic markets to remain in consolidation mode.
Consolidation to continue
"The consolidation in Nifty is on the expected lines and we recommend focusing more on the sector/stock selection for now. Apart from banking, sectors like auto and selectively pharma, realty and metal are likely to do well in near future," said Ajit Mishra, VP - Research, Religare Broking Ltd.
According to Ruchit Jain, Lead Research, 5paisa.com, In the last three trading sessions, the Nifty has traded within the range of 17600-17800, but the crucial support is intact, with market breadth being positive. "The Dollar Index, has also corrected in the last couple of sessions and is back to below 110 level which is positive for the equity markets," he added.