Domestic markets are expected to open on a flat-to-weak note Thursday, amid negative global cues. SGX Nifty at 18,666 (at 8 am IST) signals flat opening as Nifty futures closed at 18,670.25.
Equity markets across Asia-Pacific are also down following weak closing of US markets.
Ruchit Jain, Lead Research, 5paisa.com, said: “Now, all eyes will be on Gujarat Elections results where the exit polls have set certain expectations. If the outcome are in line with the same, then the market may not react much on the but any significant deviation from the expectations could then result in some sharp moves.”
Analysts said stock-specific action and sector rotation to continue.
Shrikant chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, “Markets extended losses for the 4th straight session as investors dumped realty and automobile stocks on worries that higher EMI outgo post the RBI’s repo rate hike could dent demand going ahead.”
Although the rate hike came on expected lines, the RBI showing no signs of letting off in its fight against inflation raised concerns that more hikes could be in the offing going ahead which would hurt the growth, he added.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said: Sector rotation is being witnessed in the market. Stock and sectors which have run up recently like IT, real estate, Auto, Private banks, metals are seeing some profit booking while the laggard sectors like FMCG, infra, cement are catching up.
IT stocks which have seen a sharp run up in the last two months could come under pressure in near term. Most Indian IT services companies derive around 30-40 per cent revenues from the BFSI segment, which off late is seeing some weakness. According to news reports, some of the large US and European Banks are planning to lay off people given the lower revenue projection next year, said Khemka.
According to Choice International, sectorally, the agriculture industry remained in the spotlight after Reserve Bank Governor Shaktikanta Das stated that the industry is robust and that the rabi planting has started off well. Due to the irregular rains, India is anticipating a moderating of kharif production.