Trading in Gift City indicates a flat-to-positive opening for domestic markets on Thursday, but analysts remain pessimistic. Nifty futures in Gift City are ruling at 24,508 against a Nifty futures closing of 24,482. Suddenly, the sentiment turned weak from all corners, according to analysts—global markets due to a perceived slowdown in major economies, FPIs’ aggressive selling, muted India Inc. performance, and elevated interest rates.
While the long-term growth story for Indian equities remains stronger than ever, current valuations leave limited room for expansion. This means that growth in corporate earnings will be a pivotal driver of market returns. Stock picking with a balance of growth - at a reasonable price - and quality will be critical to achieving good returns over the coming year. Said Pranav Haridasan, MD and CEO of Axis Securities,
Foreign portfolio investors sold over $10 billion worth of shares in October so far.
“Apart from the concern of continuous outflow of the foreign investors, the disappointment on the earnings front is largely weighing on the sentiment, said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Tejas Shah, Technical Research, JM Financial & BlinkX, said: The Index is making lower lows both on the daily and weekly charts, which is a negative sign. Technically, it is quite apparent that the market is facing selling pressure at higher levels. “The Nifty has once again closed below the crucial support levels of 24,750 on a second consecutive day which is not a healthy sign. Most technical indicators are in sell mode and are unlikely to reverse in a hurry. The bears are in full control of the markets at current juncture and are using every pull back rally to create short positions.” he said.
Among the key sectors, only IT is maintaining some resilience now while the majority are feeling the heat. “We thus reiterate the “sell on rise” view in the Nifty index and suggest maintaining stock-specific trading approach citing the prevailing choppiness due to earnings,” said Mishra.
Om Mehra, Technical Analyst, SAMCO Securities, said Weakness Persist in Nifty. “The daily Relative Strength Index (RSI) remains oversold, while the Directional Movement Index (DMI) is skewed to the downside,” he added.
Nifty has slipped below the neckline of a head-and-shoulders pattern, signalling a bearish trend. The next support levels are at 24,200 and 24,150. With strong downward momentum, it’s prudent to follow the trend rather than trying to catch the bottom at this point, he advised.
Meanwhile, most Asia Pacific stocks are ruling in the positive zone, albeit marginally.