Domestic markets are expeted to open firmly, thanks to a strong global cues. SGX Nifty at 18,350 indicates a gain of about 75 points to Nifty futures in the opening session. While monthly F&O expiry contracts on Thursday to keep individual stock volatile, analysts expect the positive direction to continue for markets.
“Overall, we believe that Indian markets are trading in a positive trend backed by strong corporate earnings, easing supply constraints, cooling commodity prices and strong demand across various sectors, said Mohit Nigam, Fund Manager & Head - PMS, Hem Securities.
Softening volatility and lack of negative triggers from global front are likely to keep Indian markets afloat, they added. India VIX has cooled down to the lowest in two years at 13.8 levels, thus providing downside support to the market, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
The US Stocks rallied overnight on hopes that US Fed will go slow on interest rate hikes. Besides, solid sales figures from Best Buy also boosted sentiment.
Edward Moya, Senior Market Analyst, The Americas OANDA, said the US stocks are rallying as Wall Street continues to expect the Fed to downshift their tightening pace next month and on optimism that the risk of a railroad strike fueling inflation is low.
All the three major indices - Dow Jones, Nasdaq and S&P 500 climibed over one per cent.
“The latest round of Fed speak did not teach us anything new. Fed’s Mester noted that long-term inflation expectations are reasonably anchored. The labor market is a key concern for the Fed, Mester also pointed out that labor demand is still outpacing supply. Recent trends however are showing the labor market is showing signs of cooling,” he added.
Following the US stocks gain, equities across Asia-Pacific region are also up around 0.50 per cent in early deal on Wednesday.
According to Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities Ltd, “Investors will anxiously await the October Fed Meeting minutes that are slated to be released on Wednesday. Also, some volatility will also be seen ahead of the November F&O expiry.”
Investors should use any significant dip as a strong opportunity to buy in these markets, said Mohit Nigam.