Indian stock market is expected to maintain the bullish momentum. Analysts advise investors to remain caution now. However, US stocks will influence market direction in the short term.
SGX Nifty 17,977 indicates a flat opening with positive bias though global stocks are mixed. Even though the US stocks made a strong recovery to close in the green overnight, except Japan's Nikkei, most other global markets are down in early deal on Friday. Australian stocks are flat.
Edward Moya, Senior Market Analyst, The Americas OANDA, said: the US stocks will most likely struggle for direction for the rest of the summer as Wall Street is still uncertain with how aggressive the Fed will be in September.
Meanwhile, BofA Securities said that economic activity has slowed down.
'Economic activity: Slowing momentum'
After a mixed data bag in May and June, high frequency indicators faltered in July. "For most activity indicators, sequential decline either surpassed median decline or the actual m-o-m growth fell short of the median m-o-m growth," BofA said.
"Movement of freight slowed in July vs June and in case of passenger movement, while there was some improvement, it is still below CY19 levels. Petrol and diesel demand fell sharply, same was true for power generation and tractor sales. In case of automobile sales, while both passenger vehicle (PV) and two wheeler sales rose in July vs June, the pace of expansion was less encouraging for PVs. Bank credit continued to improve, but as nominal lending rates inch up further, we are carefully monitoring it's impact on retail credit demand going forward," it added.
18,000 in sight for Nifty
Experts expect Nifty to cross 18,000. However, Nifty is facing resistance from the psychological level , of 18000 mark and closing above the same can move up further, said Choice Internatioinal.
"On the open interest data, On the call side, the highest was witnessed at 18200 followed by 18100 while on the put side was at 17800 level. The momentum indicators MACD was trading with a positive crossover on a daily time frame which suggests strength in the counter. The support for Nifty has shifted around 17800 levels while on the upside 18100 may act as an immediate hurdle," it added.
Mitul Shah - Head of Research at Reliance Securities, said: "While oil and commodity prices have softened over the past few weeks on fear of a global recession, supply chain bottlenecks and effects of the Russia-Ukraine war, remain the major overhangs for the Indian economy."