Indian markets are likely to open weak on Monday amid tension in Afghanistan. According to analysts, geopolitical tension in Afghanistan will scare bull party at the bourses and will impact foreign portfolio investors’ fund flow into the region. Almost all Asia-pacific stocks are down except China and the Philippine markets in early trade on Monday. Japan’s Nikkei index tumbled almost 1.6 per cent while others such as Australia’s ASX, Taiwan’s Weighted Average, Malaysia’s Bursa and Korea’s Kospi slipped between 0.5 per cent and 1 per cent.

Nifty futures on SGX at 16,485 (8 am IST) indicate that the domestic market is likely to open on flat-to-negative note. On Friday, Nifty futures closed at 16,517.35.

However, analysts are bullish on long-term story due to economic recovery. Retail inflation eased to 5.59 per cent in July from 6.26 per cent in June owing to softening food prices. Industrial production rose by 13.6 per cent y-o-y in June on account of good performance by the manufacturing, mining and power sectors.

Vinod Nair, Head of Research at Geojit Financial Services, said: “With positive economic data pointing towards economic recovery, the market is expected to remain bullish in the long term while the possibility of a short correction in the near term cannot be ruled out. On the backdrop of eased retail inflation, the wholesale price inflation data to be released this week is expected to cool down from June’s level of 12.07 per cent.”

Equity market is likely to continue with its strong positive momentum as economic activities are expected to further pick up pace with the lockdown measures getting relaxed, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services. The result season is now largely over with corporate earnings being in-line to better than expectations. “Going ahead, we expect corporate earnings to improve further as economy opens up and with improving vaccination trends,” he added.

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