Defying gravity and several warnings, domestic markets continue to enjoy the bullish momentum on easy liquidity. With the return of foreign portfolio investors, domestic markets are likely to continue the rally on Friday as well, though global cues are not that positive.

Analysts now justify the ‘hefty’ market valuation on the back of recent reform measures announced by the government. According to them, India is now reasonably a safe bet, as they see a sharp pick up in economic activity post reform measures.

Valuations are rich and hence could lead to bouts of profit booking. But the overall sentiment in the domestic market remains optimistic, given continuous improvement of macro data points and positive earnings expectation, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

Further the PLI schemes announced by the government so far shows strong intent to address the sectors’ challenges and pave way for development of local capabilities and capacities, thus enabling companies to capture the opportunity thrown open by China+1 strategy, he added.

SGX Nifty at 17,712 indicates, a gap-up opening of about 100 points for Nifty, as Nifty September futures on Thursday closed at 17,611.25. However, Asian markets are mixed with Japan and Taiwan rising marginally, even as equities across Australia, Korea and China are down, in early morning on Friday. Overnight the US stocks closed mixed, with Dow and S&P 500 slipping marginally and Nasdaq eking out a marginal gain.

Deepak Jasani, Head of Retail Research, HDFC Securities, said, Nifty continued to march upwards on Thursday. However advance decline ratio has fallen below 1:1 denoting profit taking across the broader markets. Sector and stock rotation among the large-caps is witnessed.

According to Rohit Singre, Senior Technical Analyst at LKP Securities, “Index again managed to close a day on fresh highs at 17,630 with gains of half a percent and formed a bullish candle for the second consecutive day. Index has further shifted its support to 17,565-17,500 zone now holding above said levels. One can expect index to trade with positive bias and any dip near mentioned supports will be again fresh buying opportunity. Fresh resistance is coming near 17,700-17,750 zone and overall, one can expect index to march towards 18k mark if mentioned supports are held.”

Related Topics
comment COMMENT NOW