Domestic markets are expected to open positive but remain volaitile as FPIs still remain sellers. SGX Nifty at 17,367 indicates that Nifty is likely open 50 point higher as Nifty futures closed at 17,317.35 on Wednesday.

Asian markets are mixed with marginal movements on either side in early deal on Thursday. The US stocks recovered from earlier losses to close flat after the Fed Minutes showed policymakers are still hawkish.

Rahul Sharma, Equity 99, said, "The volatility in markets continues post the buying in markets witnessed on Tuesday. However, we see some strength in smallcap and midcap stocks. We are of the view that next stage of rally in the market will be lead by small and midcaps. Howeverm considering the current volatility, it is require to trade with strict stop loss.'

Nifty’s premium valuation

Mitul Shah, Head of Research at Reliance Securities, said, “We expect Nifty to enjoy premium valuation for the next 1-2 years on the back of higher earnings CAGR (before reaching stable earnings pace of growth), as India becomes a preferred destination for global manufacturing, going ahead. This trend would continue over the next 4-5 years, supported by China+1 policy and the government’s support for various industries.”

However, geopolitical tensions will remain in focus as no confirmation happened with a de-escalation with Russia-Ukraine concerns.

"The market remained highly volatile as the headline index Nifty spent the day tinkering with crucial support and resistance. The choppiness may continue as long as Nifty doesn't fall below 17,300 decisively. Below 17,300, Nifty may witness a correction towards 17,000. On the higher end, resistance is likely to remain intact at 17,500," Shah added.

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