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Domestic market is expected to open negative but to remain relatively stable in the region. SGX Nifty at 16,590 indicates a marginal fall of about 60 points for Nifty at opening, as Nifty futures on Friday closed at 16,647.
Signals from Asia Pacific region remain positive as equities across Japan, Australia and Taiwan are up even as Korea's Kospi slipped in early deal on Monday. However, market experts believe that this will provide buying opportunity and advise investors to accumulate quality stocks.
Challenges and opportunities
Sorbh Gupta, Fund Manager-Equity, Quantum Mutual Fund, said, Russia-Ukraine conflict has increased inflation and supply chain challenges. "Corporates will take another round of price hikes, but it will happen with the lag to ensure it does not curtail demand recovery. Investors should use this market correction as an opportunity to increase allocation to equities and align it to their long-term financial goals," he said.
Mitul Shah, Head of Research at Reliance Securities, said trend in global equities, the movement of rupee against the dollar and crude oil prices will dictate trend in the near term. The Indian economy is in good shape given the underlying stellar corporate earnings momentum, the cleansed balance sheets, improving asset quality of the banks, levers in place for capex cycle revival and credit off-take.
"This coupled with increasing DII participation can revive the markets gradually once prevailing clouds of uncertainty disappear," he said adding, "However, over near-term war issue would have high negative bearings on the global equity markets including Indian equities."
Technical range
Technically, according to Choice Broking, the index has been trading below Middle Bollinger Band formation, which indicates further resistance around 16,850 levels. However, the Stochastic & MACD is indicating positive crossover, which suggests that the downside move is capped and price may reverse upward.
"At present, the index has support at 16,350 levels while resistance comes at 16,850 levels. On the other hand, Bank nifty has support at 33,700 levels while resistance at 35,000 levels," the domestic brokerage said in a note.
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