Domestic markets are expected to open flat on Wednesday amid mixed global cues. Following the overnight fall of US stocks, major equities across the Asia-Pacific region are down in early deal on Thursday.
However, the SGX Nifty at 17,900 indicates a flat-to-negative opening for Nifty. With the Reserve Bank of India announcing an expected 25 basis points increase in its policy meet on Wednesday, the focus now shifts to global events, said analysts.
Also read: ‘MPC felt that a 25 basis point hike is very much warranted’
Now the market has almost digested positive and negative news and awaits a clear trigger for further movement, said analysts. Till then, stock-specific action will continue with benchmark indices confining in a narrow range, they added.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said, “Since there were no surprises in the RBI’s MPC meet and the 25 bps rate hike was in line with expectations, investors resorted to buying in IT, banking and other select frontliners.”
Selling by FIIs
“The only worry factor has been the selling by FIIs as they had only about 15 per cent of their positions on the long side and 85 per cent on the short side,” said Ruchit Jain, Lead Research, 5Paisa.com.
“But, these positions too seem to be short heavy and if they start covering their short positions then that could lead to a good upmove in the indices in the near term. However, when will they trim their positions, needs to be seen,” he added.
Also read: RBI still in inflation-battle mode
The market is stuck in a narrow range. Only a break from the current channel movement will set a clear direction for markets, said analysts.
“Over the near term, the trend may remain positive, with the potential to reach towards 18000; again, a decisive breakout above the 18000 level may induce a rally towards 18350-18400. On the lower end, support is visible at 17650,” said Rupak De, Senior Technical Analyst at LKP Securities.