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Domestic markets are likely to move in a narrow range on Wednesday, ahead of the festival holidays. Analysts expect low volumes to continue at the bourses due to the holiday mood and mixed signals from global markets. Stock-specific action would continue, they said.
All eyes are on the outcome of the US Fed MPC meet, which is scheduled on Wednesday (post our market hours).
The domestic stock markets are closed on Thursday and Friday on account of Diwali.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said: “Given that Diwali is on Thursday, this week is a truncated one, with all eyes awaiting the outcome of the US Fed MPC, which could provide direction to the future course of the market. Otherwise, on the domestic front, the earnings season so far has been mixed, while macro data has been robust - giving rise investor confidence with regard to an economic recovery," he added.
SGX Nifty at 17,954 indicates a flat-to-positive opening for Nifty futures, which on Tuesday closed at 17,916.25. The US stocks remain upbeat, closing at record high levels, thanks to strong results by US corporates. But, most Asian stocks are down in the range of 0.5 per cent and 1.3 per cent in early deals on Wednesday. Bucking the trend, Australian and Taiwan equities are up.
However, with some of the recent data such as GST collections, e-way bills, FASTag collections and the manufacturing index indicating a rebound in the Indian economy, analysts expect domestic markets to remain in a consolidation phase.
Capex in full swing
Besides, a sharp increase in capital expenditure by India Inc also bode well, experts said.
According to an ICICI Securities report, "Aggregate capex by companies in H1-FY22 so far has reached Rs 1.55 lakh crore (Rs 1.29 lakh crore in H1FY21) in a seasonally weak period due to the monsoons hampering construction activity. "To be sure, India Inc’s capex in FY21 was relatively better as it remained flat at Rs 5.6 lakh crore, as against the 9 per cent fall in nominal GFCF in the economy," it said
Also, noteworthy, within the management commentary is the sanguine outlook on capex or investments driven by improving demand outlook across sectors ranging from brick-and-mortar retail outlets to Industrial companies in sectors such as infrastructure, cement and steel, it further added.
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