Domestic markets are likely to remain in a consolidation phase after a strong rally that pushed benchmarks to new heights. While SGX Nifty indicates a flat-to-positive opening for domestic markets, analysts expect broader markets to encounter profit-taking at every rise from now on. According to them, benchmarks will move in a range with a bout of volatility.

The focus will be on today’s Cabinet meeting, they added. According to reports, the Cabinet is likely to consider a relief package for the telecom sector. Besides, a production linked incentive (PLI) scheme for the man-made fibre segment and technical textiles with a financial outlay of ₹10,680 crore over five years to boost domestic manufacturing and exports from the sector is also on the cards. The PLI scheme for the auto sector (mainly for new technology) is also likely to be announced today.

According to experts, the rising volatility index is already signalling nervousness in the market. Though it cooled off on Monday, the India VIX, NSE volatility index, is still higher above 14 points.

Rahul Sharma, Co-Founder, Equity99, said, markets are expected to remain range-bound for some days after giving such a massive rally in such a short period. “Investors are advised to keep strict stop loss to their positions,” he cautioned.

SGX Nifty futures currently hovering around 17,427 (at 8 am), as against Nifty futures Monday’s close of 17,375.80 points and the Nifty spot close of 17,362.10.

Except for Japan and China markets, most Asian markets are down in early trade on Wednesday. The US stocks, overnight, closed on mixed tone. While Dow Jones & S&P 500 slipped, the tech-heavy Nasdaq maintained the momentum.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, the market seems to have shifted into a consolidation mode with range bound action. The present choppy movement with minor weakness could continue for the next 1 or 2 sessions before showing another round of upside bounce from the lows.

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