Domestic markets are expected to open flat amid mixed global cues. With the second quarter results season coming to an end, analysts expect fund flow to anchor market direction.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, said with the earnings season nearing its end, volatility is expected to remain elevated. “In this environment, traders should consider a hedged strategy, focusing on carefully selected stocks for potential gains,” he advised.
Gift Nifty at 24245 against NSE Nifty futures close of 24,226 signals a positive opening for the market. With the broad market facing pressure due to valuation concerns, analysts expect large-cap stocks will remain relatively better.
DSP Mutual Fund reveals a notable shift in market dynamics, indicating that large-cap stocks are beginning to outperform small and mid-cap stocks. “This change is underscored by the Midcap Index currently trading at its highest relative level compared to the Sensex, while the Smallcap Index approaches its peak since 2005. Such trends suggest that the Small and Midcap sectors have outperformed large caps, reaching some of their most expensive valuations in relative terms,” the report added.
Foreign portfolio investors continue to sell unabated. Unless they stop, the market will remain volatile and downbeat.
In its “Market Kaleidoscope: Quarterly Market Insights”, Pantomath Group said the Government’s push towards infrastructure development and solid economic growth will support consumption in mass as well as the luxury segment, aided by the generational shift. Rising private sector investment, undergirded by an evident revival in both rural and urban demand, is expected to boost India’s economic expansion, underscoring the crucial role domestic consumption plays in ensuring predictability for the country’s growth story. There are some lead indications of new capacity creation in a few industries and a marked pick-up in investment intentions.
Meanwhile, Asian equities opened with mixed notes as Chinese and Japanese indices are trading with marginal gains while weakness persisted in Taiwanese and Korean equity indices.
“The structural long-term equity bull market for India is intact driven by strong domestic fundamentals, government policies and Reforms. The Geopolitical tensions, Higher Interest rate & Food Inflation are potential risks for global economic growth. Budget is long term positive and monsoon development looks strong from July onwards. The stable Commodity prices and strong demand environment will keep earning momentum to continue for Indian Corporates. We continue to reiterate positive views on a market for medium to long term Investment perspectives,” the report said.