Domestic markets are expected to open on a flat note on Friday. Nifty futures is currently ruling at 22910 in Gift City as against Thursday’s value of 22,900 at the NSE. Analysts expect the market to move in a narrow range after election-triggered volatility. Analysts said the focus is now shifted to RBI monetary policy outcome. While the wide expectation is a status quo stance from RBI, the focus will be on its pronouncements, especially on GDP and inflation estimates for the financial year 2025.
Besides, trends in global markets and economies will set the direction of Indian markets in the short term, said experts,
Ajit Mishra – SVP, Research, Religare Broking Ltd, said: It appears that markets have adjusted to the recent election results, and stability on the global front is further boosting positivity. “While a breather in the Index might occur after the recent rebound, the overall tone is likely to remain positive. With all key sectors participating in the move, we suggest maintaining a “buy on dips” approach, focusing on quality names during pullbacks,” he added.
After the Bank of Canada and ECB reduced interest rates, analysts said the focus will be on foreign portfolio investors, who have been selling in the cash segment.
According to Ashwin Ramani, Derivatives & Technical Analyst, The Foreign Portfolio Investors’ (FPIs) Long Short ratio rose from 12.75 per cent on June 4 to 17.49 per cent on June 5, as the FPIs covered some short positions and built long positions in Index futures. Call writers (Bears) exiting and additional put writing was observed at all strikes from 22,000 until 22,500, which kept the Index steady throughout the day. Strong put writing was observed at the 22,600 & 22,700 Strikes in the Index. The call & put writers fought fiercely at the 22,800 Strike, and the option activity at this strike will provide cues about Nifty’s Intraday direction, he said.
Bank Nifty opened with a gap up, too, and traded sideways throughout the day, closing 237 points higher at 49,292. Strong put writing was observed at the 48,500 & 49,000 Strike in Bank Nifty. The call writers (Bears) pressured the put writers at the 49,000 Strike. He further said that the option activity at the 49,000 Strike will provide cues about Bank Nifty’s future direction.
Meanwhile, Asian stocks are mixed. Japan and Chinese markets are down marginally while Australian stocks eke out small gains.
Accordingto Shrikant Chouhan, Head of equity Research, Kotak Securities:, technically, after a gap up opening the entire day the market hovered between 22650 to 22900/74475-75290 levels. “However, on intraday charts the market is still holding uptrend continuation formation, which is broadly positive. We are of the view that, the Index has completed one leg of pullback rally and we could see some profit booking at higher levels. For the day traders now, 22650/74475 would act as a key support level. As long as the market is trading above the same, the positive sentiment is likely to continue. On the higher side, the Index could find the resistance at 22900-23000/75290-75500. On the other side, below 22650/74475 uptrend would be vulnerable,” he added.