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Domestic markets are likely to see a positive opening on Tuesday, amidst a slew of positive economic data and global markets.
After rebound in IIP (index for industrial production) last week, inflation is at 5.3 per cent (released on Monday) strengthened the bullish sentiment further, as analysts expect the rate hike will not happen in FY22.
Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank, said: "The headline inflation came in softer than our expectations largely led by the downward surprise of food prices. We expect the subsequent readings to remain fairly benign and much lower than RBI estimates. The softer inflation would provide relief to the policymakers and more room to move much slower in terms of policy normalisation. We continue to expect only tweaks to liquidity tools to manage temporary liquidity surplus in the near term."
However, analysts expect the market to remain in consolidation mode before taking a clear direction. “Nifty continues to close in a narrow band of 17,353-17,378 over the past five sessions. This reflects lack of enthusiasm on the part of sellers to sell aggressively while buyers keep nibbling at individual stocks, said Deepak Jasani, Head of Retail Research, HDFC Securities.
SGX Nifty at 17,405 (8 am), indicates Nifty to see a gap up opening of about 50 points. Nifty futures on Monday closed at 17,359.30 on the NSE.
Asia-Pacific stocks are mixed with Japan, Korea, Taiwan and the Philippines are ruling moderately higher. However, equities across Hong Kong, China, Australia and New Zealand are down marginally. Overnight, the US stocks closed flat.
Rahul Sharma of Equity99 said, Markets are still expected to consolidate. “We are still bullish on Mid & Small caps as this week many companies have come out of the Trade-to-Trade category and we expect them to be out of the ASM list with the next 3 weeks.”
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities, said: Over the last four days, the index has been hovering between 17,250 to 17,435 levels. At the same time, the Nifty is consistently taking support at 17,250. As long as the index is trading above 17,250, the bullish formation is likely to continue up to 17,450 -17,500 levels. However, trading below the same could possibly trigger correction up to 17,200-17,150 levels.
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