Domestic markets are expected to open on a flattish to negative note on Tuesday, amid mixed global cues. Analysts expect profit-taking and sector rotations to continue in the Indian markets in the results season. The focus will also be on the US Fed meet, which is scheduled on July 30-31.
According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, Nifty was just a kiss away from the 25k mark. Once the index crosses the psychological level, sentiments will get a further boost. This week the market will focus on policy meetings globally as the US Federal Reserve, BOE, and BOJ will announce their decisions, he said. “Thus, interest-sensitive sectors, including banking, will remain in focus. Overall, we expect the market to continue its gradual uptick, however, volatility cannot be ruled out ahead of key events,” he added.
Meanwhile, global stocks are ruling weak in early deals on Tuesday. However, derivative trading indicates a bullish undertone, said analysts.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities, said: “Recent activities in the options market reflects a slight uptick in bearish sentiment, with a greater focus on writing Calls options over Puts options. This shift of sentiment at ATH levels is a sign of caution in the index. Significant open interest is noted at the 25,000 call (80.65 lakh) and 24,500 put (62.05 lakh) options. Notable trading interest is also observed in the 24,600-24,800 puts and 24,900-24,500 calls. The Nifty Put-Call Ratio (PCR) decreased from 1.27 on Friday to 1.00, indicating a slight shift away from puts towards calls as the market reacts to the rejection at the 25,000 mark. The max pain level is positioned at 24,800, anchoring the index’s movement,” he said.
The India VIX experienced a 5.73% intraday increase, settling at 12.94, up from 12.24 on Friday. This rise indicates a slight increase in market fear as the index approaches the 25,000 mark.