Nifty to open flat as all eyes on FPIs strategy

K. S. Badri Narayanan | | Updated on: Jan 04, 2022

Mumbai: People walk past a digital screen, displaying stock prices, on the facade of Bombay Stock Exchange (BSE), in Mumbai, Monday, Feb. 1, 2021. The BSE benchmark Sensex zoomed over 1,700 points and the NSE Nifty reclaimed the 14,000-level driven by gains in financial stocks, following the budget speech. (PTI Photo/Kunal Patil)(PTI02_01_2021_000107A) | Photo Credit: KUNAL PATIL

Most Asian markets are ruling positive except China, Hong Kong and Korea

SGX Nifty indicates a flat to positive start for Indian markets. With major global markets giving a bullish signal, despite divided views on Omicron virus, Indian stock markets are likely to remain positive, say analysts. The focus now shifts from performance of India Inc for third quarter, budget expectation and foreign investors behaviour, they added.

Santosh Meena, Head of Research, Swastika Investmart, said: “In terms of cues, we don’t have any major trigger tomorrow other than updates related to Covid. The minutes of the US fed meeting will be out on Wednesday. If we look at the profile of the stocks which rallied today then we can expect some buying figures by FIIs.”

After remaining sellers for the last three months, FPIs bought shares over ₹900 crore on the first trading day of 2022. Though it’s early days, one needs to wait and watch how things pan out on this front. If FPIs really change their hearts and start accumulating Indian equites, one can see a dizzying rally for Indian markets, analysts said.

SGX Nifty at 16,693 indicates a flat opening as Nifty futures closed at 16,692. Most Asian markets are ruling positive except China, Hong Kong and Korea.

“We expect the positive momentum to continue in the market. However, investors are advised to keep some capital aside to take advantage of any major dips considering the rising Omicron tally. Pharma sector could be great bet looking at the current scenario,” said Rahul Sharma, Co-owner Equity 99.

Healthy GST collections

According to analysts, the positive catalyst for Indian markets is GST revenue collected in December 2021 which was over ₹1.298 lakh crore, 13 per cent higher y-o-y. December is the sixth month in a row when revenue from goods sold and services rendered stood at over ₹1 lakh crore.

The government’s focus is clearly on supporting growth through sufficient liquidity and low interest rates despite street fears over rising inflation, changes in interest rate policy by global economies and high commodity prices.

“However, India is at the beginning of capex revival phase and therefore corporate earnings recovery looks sustainable and premium valuations might sustain.” said Mitul Shah, Head Of Research at Reliance Securities.. “We believe that India is better placed compared to major global economies in terms of handling Covid and its spread, while revival of capex and higher growth potential over next one to two years would keep Indian economy expansion ahead of many other nations. This would lead to bounce back in indices.”

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, “We are of the view that, the market is into the strong uptrend, but due to the temporary overbought situation, market may witness some profit booking at higher levels. For traders, 17,550-17,500 would be the key support levels to watch on the Nifty. On the other side, 17,700-17,735 would act as a key resistance level. Below 17,475 on the Nifty uptrend would be vulnerable.

Published on January 04, 2022
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