Stocks

Market to remain volatile amid mixed global cues

KS Badri Narayanan Chennai | Updated on October 27, 2021

SGX Nifty ruling at 15,320, signalling a flat-to-positive opening for Nifty futures

Domestic markets are expected to open firm on Wednesday, amid mixed global cues. Though foreign portfolio investors are yet to turn buyers, Indian markets will see buying interest from domestic investors, said market participants. However, impending expiry of F&O contracts on the NSE on Thursday will keep market volatile, they added.

Overnight, the US stocks hit at all-time record high, thanks to a strong result from top US companies such as Microsoft, Google and General Electric. However, Facebook results weigh down the sentiment, as US benchmarks closed on flat note.

The Dow Jones Industrial Average rose 15.73 points, or 0.04 per cent, to 35,756.88; the broader S&P 500 added 8.31 points, or 0.18 per cent, at 4,574.79; and tech-heavy Nasdaq Composite moved up 9.01 points, or 0.06 per cent, at 15,235.72.

SGX Nifty, after hitting a high of 15,357, is currently ruling at 15,320, signalling a flat-to-positive opening for Nifty futures, which on Tuesday closed at 15,314.

However, Asian markets are in a sea of red. Equities across Japan, Australia, China, Hong Kong and Korea fell between 0.4 per cent and 1.7 per cent amid inflation concerns. Besides, China’s Evergrande Group’s deepening debt crisis also weigh down the sentiment.

Ajit Mishra, VP - Research, Religare Broking, said: “Indications are in the favour of further rebound, however a lot would depend on the earnings announcements scheduled in the following sessions. We have some prominent names like Bajaj Auto, ITC, IndusInd Bank, Maruti and LT, who will announce their results on October 27. Besides, global cues would also remain in focus. Participants should maintain a positive yet cautious approach and prefer hedged positions,” he added.

Binod Modi, Head Strategy at Reliance Securities, said: Domestic equities do not look to be inspiring as of now. Notably, high input costs have adversely impacted margins and profitability of select consumer and manufacturing companies despite steady volume and sales growth. This essentially raises concerns about sustainability of earnings rebound in subsequent quarters, which has weighed on sentiments.

“In our view, market may remain volatile with downward bias in the near term and investors will track pricing power of the industries. Notably, MPC meeting minutes pointed towards uneven growth as 55 per cent of 404 industries in India are still operating below FY20 levels. This essentially indicates that the interest rate scenario is unlikely to reverse in the near to medium terms and should continue to support earnings despite elevated cost pressure, he added.

Published on October 27, 2021

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