Domestic markets are expected open on a flat note on Tuesday. Analysts expect profit taking and less participation. Nifty futures at 19,449.50 in NSEIX signals a flat opening but in positive zone. 

The ongoing rally in global stock markets and India’s strong macroeconomic stability have led the market to reach an all-time high, which we expect to continue further at least for the short term., said Riches Vanara, Technical And Derivatives Analyst, stoxbox.

As the US market is closed today (July 4 Independence Day), Asian stocks are ruling mixed. Domestic markets will face the same resistance given the elevated valuations said analysts.

Rakeshh Mehta, Chairman, Mehta Equities Ltd, said, “The mood in the frontline market is very optimistic looking at the aggressive FII inflows and settling down of global macro headwinds followed by better than strong domestic microeconomic data.”

Also read: GIFT Nifty commences operations with first 9-hour session ending with $1.3billion volumes

5 positives

The 5-big positive catalysts driving the current upsurge are India’s strong GST collection that crossed ₹1.60 lakh crore mark in June, better recovery in monsoon in June and normal rains expected in July as well, expected stable interest rate scenario worldwide, the US Q1 GDP reassessment from 1.3% to 2%, and easing of US PCE inflation that offers relief to investors who were worried about further interest rate hikes., said Rakeshh Mehta.

Ameya Ranadive, Equity Research Analyst, Choice Broking, said, “Currently, the market is largely driven by bullish sentiment, and there has been significant retail participation at these elevated levels.

Higher highs

“Remarkably, the Nifty has been consistently achieving higher highs for 14 consecutive weeks. In order for this upward trend to continue, it is crucial for the Nifty to maintain levels above 19,250, which could pave the way for further advances towards 19,450 and 19,550 levels. On the downside, support is expected at 19,200 and 19,100 levels,”, he said.

Also read: ‘GIFT Nifty is a signal to global financial markets that IFSC is now in the game’

VIX still in comfort zone

The India VIX, which measures market volatility, experienced a rise of 7.23 per cent from 10.80 to 11.58 levels. “Despite this increase, volatility remains below the 12 zone, providing support to the current high market levels,” said Ameya Ranadive.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said,“The overall structure of the market remains positive with Nifty attaining new highs at a steady pace. We expect PSU Banks to remain in focus on the expectation of healthy Q1-FY24 numbers. With the monsoon deficiency reducing to 10 per cent, agri-related stocks are like to be in focus.”

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