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Domestic markets are expected to open on a flat note with positive bias. SGX Nifty at 17,720 indicates a flat opening, as Nifty futures on Friday closed at 17,713. Asia Pacific markets too swinging between gains and losses in early deal on Monday.
Analysts expect the market to stay in the narrow range, ahead of result season and RBI monetary policy.
The RBI's Monetary Policy Committee, first in the current fiscal, is scheduled for April 6-8. Though most experts believe RBI would maintain the rate at current levels and take measures supporting the economic growth, its comments on inflation, which is rising to uncomfortable level due to crude oil prices, will be closely monitored.
Key factors to watch
According to analysts, most negative news have been discounted by markets and FIIs’ interest will help in recovery.
Factors like high fuel prices, lingering inflationary pressures and continuing uncertainty in Eastern Europe may exert some influence on the markets in the coming days, said Dr. Joseph Thomas, Head of Research, Emkay Wealth Management.
"Any moderation in any of these factors and their intensity will have a huge positive impact on the market sentiment,” he added.
April booster
According to Santosh Meena, Head of Research, Swastika Investmart, April, historically, remains one of the best months for the equity markets where midcap and smallcap stocks tend to outperform.
"It will be important to see how FIIs will behave in FY23 after relentless selling in the second half of FY22. However, they have changed their gear in the last week with decent buying of ₹5,600 crore," he added.
F&O indicates bullish bias
Besides, healthy rollover into April contracts in the derivative segment also signals positive bias, said marketmen.
"If we look at the derivative data then the April series begins on a strong note as FIIs' long exposure stands at 71 per cent and the put-call ratio is sitting at a comfortable level of 1.31," he said, adding "Fear index or volatility index India Vix has also fallen below the 19-mark. However, it has support near 200-DMA around 17.5".
According to Meena, “Open interest distribution chart indicates that put writers are looking confident at the 17500 level while 18000 looks as immediate resistance.”
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