Domestic markets are expected to open flat on Tuesday, with a downward bias. After a sharp rally in the last two days, analysts expect some moderation.
The Nifty futures at Gift Nifty is ruling at 24,280, against the Nifty Dec futures value of 24,421 and the Nov future value of 24,273. Analysts expect the market to remain volatile ahead of Thursday’s expiry of November contracts. The market will closely monitor the Centre’s expenditure programme after the Bharatiya Janata Party’s thumping victory in Maharashtra.
Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said: “ With elections now behind, we expect the government to now focus on spending (1HFY25 govt. spending is flat YoY and is down 17% for Capex spending). This poll result, coupled with a recovery in rural spending (on the back of good monsoon and expected strong Kharif output) should improve the demand narrative. The wedding season in 2HFY25 (30% higher weddings YoY) will also provide a fillip to demand. We also expect modest recovery in corporate earnings in 2HFY25E (Nifty earnings expected to grow 7% in 2H vs. 4% in 1H).”
Markets will focus on Q2 GDP data and Infrastructure output. In the US, the focus will be on core PCE inflation data, said Satish Chandra Aluri, Lemonn Markets Desk.
Despite a sharp bounce back in the last two days, technical experts say the undertone still remains weak.
Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd. (A Pantomath Group Company), said: “Nifty opened with a gap up, then witnessed range bound stabilization throughout the day before closing on a high note near 24,222 levels. The volatility index India Vix fell by 4.93% to 15.30, indicating a decline in market volatility.
“Technically, on a daily chart, Nifty has formed a doji candle, signifying uncertainty. If the index sustains above today’s high of 23,352, it could attempt the levels of 24,500-24,550, where the significant resistance is located. On downside, 21-Days exponential moving average (DEMA) is placed near 24,060. Thus, 24,050-24,060 will provide immediate support for the index. Short term traders are advised to book profits near 24,500 and wait for a fresh breakout,” he said.
Dhupesh Dhameja, Derivatives Analyst at SAMCO Securities, said: Options data reflects a balanced sentiment, with notable call and put writing at key levels. The 24,500-strike call exhibited the highest open interest, with 80.07 lakh contracts, while the 24,000-strike put attracted significant positions, with 58.08 lakh contracts.
Key activity centred around the 24,300–24,500 call range and the 24,200–24,000 put range, underscoring immediate resistance at 24,500 and firm support near 24,000, he said, adding that rising put writing between the 24,000–24,500 levels signals strong buying interest, while muted call writing reflects improving sentiment.
The put-call ratio (PCR) slipped to 1.03 from 1.15, hinting at an emerging bullish sentiment. He further said the “max pain” level at 24,250 indicates limited downside risks in the short term.