Domestic market will continue to see volatile trading pattern on Thursday, which will see settlement of F&O contracts on the NSE. Though SGX Nifty indicates a positive opening, unabated foreign portfolio investors selling will continue to weaken the market. However, global stocks are negative.
Profit booking and margin pressure faced by India Inc due to input cost inflation will keep the market under pressure said analysts.
Morgan Stanley, after UBS, HSBC and Nomura, too downgraded Indian equities to Equal Weights (EW) on valuations and short-term headwinds.
With a flurry of results scheduled on Thursday as well, market willwitness stock-specific action, analysts said.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said: "Market volatility would continue over next few sessions given ongoing corporate earnings season, mixed global cues and monthly F&O expiry due tomorrow. Stock specific action would continue in the market as the result season unfolds. Large part of focus would shift to the primary market where 6 companies including biggies like Nykaa, Policybazaar and Paytm would be hitting the market with their IPO over next two weeks.
The US stocks closed mixed with Dow Jones slipping 0.75 per cent or 266 points and S&P 500 declining 0.51 percent. However, tech-heavy Nasdaq closed flat at 15,235.
SGX Nifty at 18,258 indicates a positive opening as NIfty Oct futures and Nifty Nov futures closed at 18,215 and 18,245 respectively. Equities across Asia-Pacific regions have fallen between 0.1 and 0.7 per cent in early trade on Thurday except Taiwan, which eke out a marginal gains.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said: Ahead of monthly F&O expiry, volatility may continue, hence level-based trading would be the ideal strategy for day traders. "For the bulls, 18,100 would be the key support level and if the index breaches the level, there is a strong possibility of a quick intraday pullback rally up to 18,300-18,350 levels. On the other hand, the dismissal of 18,100 could possibly open another round of correction wave up to 18060-18000," he added.