SGX Nifty signals 80-point gap-up opening for Nifty

KS Badri Narayanan Chennai | Updated on October 26, 2021

Domestic investors back as buyers but FPIs remain sellers

Indian markets are likely to open positive note on Tuesday, thanks to strong global cues. However, the settlement of NSE derivative contracts on coming Thursday, will keep the market volatile. Though the headline benchmarks show some resilient, broader markets will continue to remain under pressure, said analysts.

Analysts caution investors not to buy the beaten down mid & small-cap stocks, as the “worst is not yet over for them”. However, market participants expect some bounce back in the mid and small-cap space.

Nomura downgrade

Nomura has downgraded Indian markets to neutral from overweight rating due to unfavourable risk-reward given high valuations, as a number of positives appear to be priced in, while headwinds are emerging.

While domestic investors, who were sellers till the third week of October, turned buyers in the last few days, FPIs remain net sellers in equities. Analyst expect portfolio churning will be down by both the big players of Indian market. On Tuesday, FPIs sold shares worth about ₹2,450 crore while DIIs bought about ₹2,400 crore.

Also read: Sensex ends 145 points higher, Nifty above 18,100 amid volatility

According to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, said, “During this week, market consolidation is likely to continue on account of mixed corporate earnings, weak global cues and monthly F&O expiry. Market would continue to track rise in Covid cases in China and Russia for further cues.”

On Tuesday, two major banks viz Axis Bank and Kotak Bank would be declaring their results and hence Bank Nifty would continue to be in focus. This apart all eyes would be on two large IPOs upcoming this week with Nykaa and Fino Payments Bank cumulatively raising about ₹7,000 crore, he added.

SGX Nifty at 18,225 indicates a 80-point positive opening for Nifty futures, which on Monday closed at 18,145. Asia-Pacific markets are in see of green with Japan’s Nikkei gaining almost two per cent. Rest of the Asia-Pacific markets are up between 0.1 per cent and 0.6 per cent, Overnight, the US stocks jumped.

Also read: Markets to open positive, but institutions backing needed to sustain gains

Rahul Sharma, Co-Founder, Equity99, said, “The market is expected to remain volatile with profit booking seen across wider markets while the underperforming banks have been showing a good move recently. We expect some movement in Bank Nifty with Axis Bank and Kotak Mahindra Bank set to declare their results. The volatility in markets is expected to continue in the coming days. Investors are advised to keep strict stop loss to their positions.”

Published on October 26, 2021

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