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Domestic stock markets are expected open on a positive bias even as investors are nervous on the outcome of US Fed meet. The settlement of monthly F&O contracts today will add to volatility especially during closing hours said analysts, as traders need to decide on carrying over the positions to next month series.
SGX Nifty at 17,700 indicates a gap-up opening of about 100 points for Nifty futures.
Eyes on currency market
“With the ongoing spike in natural gas prices in Europe, there is increasing recognition of a synchronised recession in the EU, US and China in the rest of CY22 – as a result, currency market volatility has been dictating the macro flow picture for equities too," said S. Hariharan, Head- Sales Trading, Emkay Global Financial Services.
FPI flows were constructive till last week but have now started turning negative and are best reflected in build-up of short interest in index futures, he said, and added, "Retail have been on the sidelines, and did not participate in the previous rally, but can be expected to start providing buying support to Nifty around its 50-week moving average at 17150."
Global stocks up
Overnight, the US stocks eked out marginal gains. After a long while, almost all Asia-Pacific stocks are trading in the green. Equities across Korea, Australia and Taiwan are up between 0.6 per cent and 0.7 per cent while Japanese and Chinese markets gained in the range of 0.2-0.4 per cent.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd said amidst fragile global sentiments, FII buying is providing support to the market though investors are staying on the side line ahead of monthly F&O expiry on Thursday and are cautiously awaiting the outcome of Jackson Hole symposium meeting and US GDP data, due later this week.
“While the headline indices continued to consolidate, the broader market is seeing action in midcaps and smallcaps where the valuation is still attractive. Thus, momentum is likely to gather pace in them with lot many stock specific action,” he added.
According to Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities, “Medium term outlook remain positive with buying on dips advisable. In the short term, expect volatility to remain high on account of global markets. IT and select energy stocks look attractive at current levels while Metals and cement continue to consolidate.”
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