Nifty expects to see a 120-point gap-down opening

The domestic markets are expected to open with a gap down on Monday as the new week is likely to see profit-booking. While most Asian stocks are closed on Monday, benchmarks in Australia and New Zeeland have tumbled more than a per cent. TUS stocks, too, closed sharply lower on Friday after hitting new highs.

SGX Nifty futures at 17,485 (7 am IST) signals a 120-point gap down for Nifty futures, which closed at 17,603.15 on Friday.

Analysts expect the market to see profit-taking, as the current valuation is not sustainable.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: Valuations are not comfortable and hence could lead to bouts of profit-booking. The weak global cues on account of worry over slower economic growth and rising Delta variant cases globally would keep the market oscillating between greed and fear. "Nervousness would be seen in the market ahead of the Federal Reserve meeting, which could provide some indications on when the central bank will start withdrawing its monetary stimulus and start raising interest rates," he added.

Head of Equity Research (Retail), Kotak Securities Ltd, Shrikant Chouhan, said: Technically, the benchmark Nifty maintained its uptrend continuation formation, which is broadly positive, but due to the temporary overbought situation, bulls may prefer to take a cautious stance near the 17,800 resistance level. For Nifty, 17700 would be the immediate resistance level, and below that, the correction wave is likely to continue up to 17450-17350 levels.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: "An important trend in FPI investment since July is the increasing inflows into equity and debt. After the Rs 12,308 crore of selling in equities in July, FIIs have been steadily increasing their buying in equity with Rs 2,083 crore in August and Rs 11,287 crore up to September 18. Buying in deb,t, which began for the first time this year in July, continues in September, aided by the steady rupee".

The regulatory crackdown in China and the consequent huge erosion of investor wealth has made India an attractive investment destination for FIIs, he said, and added that FIIs have been showing interest in segments such as hotels & travel, since these segments have begun to do well. Some profit-booking is seen in segments such as metals and insurance, which have appreciated handsomely.

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