Indian stocks are expected to open on a flat note and remain lacklustre through the day. According to analysts, as Wednesday is a trade holiday due to Muharram, traders will keep their positions light. However, the undertone remains strong, they added. The focus is now on ongoing results and the upcoming Budget, experts said.
Macro numbers released on Monday gave a mixed signal. Net direct tax collections increased by 20 per cent y-o-y to ₹5.74 lakh crores, aided by higher advance tax payments and WPI inflation inched up higher to surges 3.36% in June.
Aditi Nayar, Chief Economist, Head of Research and Outreach at ICRA Ltd. “India’s merchandise trade deficit widened to $21.0 billion in June 2024 from $19.2 billion in June 2023, amid a surge in the oil deficit. The number was also mildly higher than the average deficit of $20.6 billion seen in the first two months of FY2025.
Owing to the slightly faster growth in imports vis-à-vis exports, the merchandise trade deficit expanded to $62.3 billion in Q1 FY2025 from $56.2 billion in the year-ago quarter. This is expected to push up India’s CAD to ~1.4% of GDP from 1.0% in Q1 FY2024 and turnaround the transient surplus of 0.6% of GDP that was seen in Q4 FY2024,” she said.
Meanwhile, Gift Nifty at 24,640 signals a flat opening as Nifty futures on Monday closed at 24,620.
Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One Ltd, said the collective involvement of mid-small caps and index heavyweights has significantly boosted market sentiment, laying a strong foundation for positive market dynamics. ‘The bulls have shrugged off overbought conditions and propelled major key indices to unprecedented highs. Despite the Nifty remaining technically stretched, there are no indications of the vertical rally losing steam. It is crucial to approach this scenario with caution and avoid being swayed by the prevailing trend,” he said.
“We expect ongoing momentum to continue with sectorial rotation and stock-specific action,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities, said: Nifty hit a new all-time high of 24,635 on July 15. All Strikes from 24,200 until 24,400 saw call writers exiting (bears exit) and put writing (bulls’ entry). Strong put writing was observed at the 24,600 Strike in the Index. The put writers (2.56 lakh contracts) lead the call writers (1.43 lakh contracts) by a fair margin at the 24,500 Strike and the option activity at this strike will provide cues about Nifty’s future direction,” he added.