After hitting new peaks, the domestic markets are expected to open on a flat note with a negative bias on Tuesday. Analysts expect consolidation in the pre-Budget phase to continue given that most factors favour the markets.
Dhiraj Relli, MD & CEO, HDFC Securities, said: The upmove was supported by local retail and HNI monies - direct and through mutual funds (monthly SIP inflows crossed ₹13,000 crore in October 2022) - and was topped up by FPIs, who pumped in ₹32,344 crore till November 28.
“The undertone of the Indian market remains bullish despite the global headwinds. They could continue to do well, with intermittent corrections till the forthcoming Union Budget,” he added.
SGX Nifty at 18,670 indicates a decline of about 30 points, as Nifty futures on Monday closed at ₹18,694.10. Asian-stocks were mixed in early deals. While the Nikkei is down, markets in Singapore, China, Hong Kong and Korea are up marginally.
Mitul Shah - Head of Research at Reliance Securities, said: “We expect a recovery in the coming quarters, led by softening of commodity prices and monetary easing by central banks, which is likely to boost demand going forward. The rupee movement, FII flows and crude oil prices will dictate the near-term trend, while volatility is likely to remain due to the endless Russia-Ukraine crisis and new Covid cases in China.”
Going ahead, despite global concern around rising Covid cases in China, we expect the Nifty to gradually march towards the 19K mark, as the overall trend remains positive. Further, participation of the broader market adds strength to the market. However intermittent volatility cannot be ruled out on account of global worries. Thus, one can take advantage of this to churn their portfolio and add good stocks in the portfolio.