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Domestic markets are likely open with a 60-point gap up opening on Monday as the underlying economy shows a strong rebound. With reports suggesting the advance tax paid by top 20 corporates jumped almost 50 per cent, analysts expect corporate-profits will catch up with the ‘elevated’ valuation.
Finance Minister Nirmala Sitharaman has also expressed confidence in the revival in domestic economy. “I can see, very clearly, signs of revival and good signs of revival. Otherwise, my revenue collection would not be where it is, both the GST and direct taxation,” Sitharaman said last week.
She further said that the confidence in the Indian stock market is growing as retail and small investors are keenly investing in the share market.te
Gap-up opening expected
SGX NIfty at 18,008 indicates 60-point gap-up opening for Nifty, as Nifty futures closed at 17,853 on Friday. US stocks, too, closed flat but recovered from day’s low. Equities across Asia-Pacific region are up in the range of 0.3-1.3 per cent in early deal on Monday.
Nish Bhatt, Founder & CEO, Millwood Kane International, said, “Not only the institutional investors, but also the retail investors provided legs to the current market rally. India saw millions of new retail investors entering the market as interest on bank deposits dipped. The number of demat accounts has crossed 50 million,” he added.
The rally in the market is on prospective unlocking the pace of vaccination despite a huge population. The demand push during the festive season coupled with an earnings upgrade for the market is another positive. The rally in the domestic market along with the Fed’s commentary on tapering may have some bearing on the RBI's policy announcement next month, he further said.
According to Aashish Somaiyaa, Chief Executive Officer at White Oak Capital, with the depth of the damage — that may have been caused by Evergrande but is still not clear — and some economic numbers from the US likely to be released, the markets may witness some amount of volatility during the course of the week, and also some profit-booking.
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