Domestic markets are expected open on a flat note on Monday, going by the indication from SGX Nifty. Analysts expect market to remain volatile due to the settlement of F&O April contracts this Thursday. However, strong set of numbers from index heavyweights such as Reliance Industries, ICICI Bank and HDFC Bank to keep market firm, says analysts. The focus will be on results of other companies and expiry-related rollovers in derivative segment, they added.
However the lacklustre trading in the global markets to keep Indian benchmarks too on sideways.
Stock-specific action
Dr. Joseph Thomas, Head of Research, Emkay Wealth Management on the markets, said the markets trended lower during the week gone by, as IT sector witnessed a drag owing to a weak set of numbers declared by one of the majors.
“The concerns regarding global economic outlook too impacted the sentiments; a strong growth reported by China failed to meaningfully influence the bulls. Over the near term the markets may be expected to be volatile, led by very stock specific movements as the earnings season goes underway in full swing,” he said.
SGX Nifty at 17685 signals a flat opening as Nifty May futures closed at 17711.75 and April futures at 17655.80.
Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd, said: “Ongoing quarterly results season will be in focus as the IT sector’s heavyweights have disappointed us with lower-than-anticipated earnings to date. Indusind Bank, Bajaj Auto, Nestle, Bajaj Finance, Voltas, ACC, Coforge, Tech Mahindra, Wipro, Ultratech Cement are some of the companies which will announce their results this week.
“Despite the recent decline, we still remain optimistic about the long-term outlook of the market. In the short term, Nifty can experience some selling pressure,”
Asian stocks are mostly negative despite positive closings in the US stocks last week. Except Japan, other markets are down marginally in the Asia-Pacific region.
F&O signal
According to Arvinder Singh, The 17700 call strike has the highest open interest placement, followed by the 18000 strike, while on the put side, the maximum open interest was seen at 17600 and 17500. Total cumulative call open interest was recorded at 12.35 crore, while put open interest stands at 10.12 cr. After combining both derivative and technical pictures in one frame, it doesn’t portray a rosy picture for the market in the short term.
Ruchit Jain, Lead Research, 5paisa.com: In derivatives segment, FII’s have covered their short positions in the April series and their ‘Long Short Ratio’ has improved from 10 per cent at the start of this month to 38 per cent.