Flat opening seen for Nifty, Sensex, as markets enter consolidation phase

KS Badri Narayanan Chennai | Updated on September 28, 2021

Volatility index above 18 raises alarm

Domestic markets are likely to open flat on Tuesday, as analysts see further consolidation around current levels. However, the volatility index rising above 18 signals nervousness in the market, as the valuation looks stretched, they added.

With monthly F&O expiry on Thursday nearing, individual stocks will see volatility, said experts. Besides, as there are no near-term clues, domestic markets will align with global movement, they said.

The SGX Nifty at 17,932 indicates a flat-to-positive opening for Nifty, as Nifty futures on Monday closed at 17,856. US stocks, on Monday, displayed mixed outcome, with Dow ending 0.2 per cent higher, Nasdaq and S&P 500 slipping 2.3 per cent and 0.5 per cent, respectively.

Domestic equites do not appear to be inspiring as of now, said Binod Modi, Head Strategy, Reliance Securities. “Benchmark indices outperformed global markets in recent week as favourable FOMC meeting outcome and sustained recovery in key economic indicators bolstered investors’ confidence. Notably, tax collection data for H1FY21 looks quite impressive, which virtually crossed pre-pandemic FY20 numbers with a wide margin. This along with government’s borrowing target of ₹5.03 lakh crore (mostly on expected line) certainly bodes well for economy and bond markets,” he added.

Asian markets down

Most equities across Asia-Pacific region are down in the range of 0.2-1 per cent in early deal on Tuesday. However, markets in China and Hong Kong were up.

Markets are expected to consolidate in the coming days, we expect the banking index to show some moves along with automobiles, said Rahul Sharma, Co-Founder, Equity99.

“India is at the beginning of capex revival phase and therefore, corporate earnings recovery looks sustainable and premium valuations might sustain. Additionally, government’s focus to improve credit growth through credit outreach programme and continued traction in PLI schemes augur well for domestic economy,” Modi added.

Published on September 28, 2021

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