Indian stock markets are expected open on a negative-to-flat note on Friday, which will see the beginning of new derivative series on the NSE. According to analysts, besides rich valuations, the Reserve Bank of India's plans to drain liquidity also impacting sentiment.

S Ranganathan, Head of Research at LKP Securities, said: "Expiry Day witnessed all-round profit booking ranging from retail facing lenders to FMCG and across Metal names. Amidst all the ongoing excitement around the Primary Market Offerings , the Bulls had nothing going right for them as sectoral indices ended in the red. Both the benchmark indices fell 2 per cent in late afternoon trade on inflationary pressures and their likely impact on demand. Cement stocks however was a notable exception on Thursday."

Analysts said, FPIs not only selling in the cash segment but added more bearish positions on Nifty futures, signalling that the worse might not have been over.

With retail investors shifting to IPO market and domestic institutional investors unwilling to commit huge sum, there is no resistance to the selling by foreign investors, added analysts.

The SGX Nifty at 17,904 signals a flat opening for Nifty futures, which on Thursday closed at 17,913. Asia-Pacific stocks are down at open on Thursday even as the US stocks closed sharply higher.

Rahul Sharma, Co-Founder, Equity99, "Markets have been volatile and after Thursday's move, we might see a further down move. Investors are advised to be cautious also considering the results season."

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said: After a long time, the Nifty closed below 20-day SMA which is broadly negative for the market. For day traders, the short-term trend is weak as the market is in a temporary oversold situation but a quick pullback rally cannot be ruled out.

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