Domestic markets are expected to open on a positive note. According to analysts, since Thursday will see the expiry of July contacts at the NSE, the market will remain volatile. The expected 25 basis points hike by US Federal Reserve will only have a little impact, they added.

The US Federal Reserve raised the target range for its benchmark interest rate by 0.25 per cent on Wednesday and left the door open to more rate hikes. The hike brings the Fed’s policy rate, the federal funds rate, to a new range of 5.25 per cent and 5.5 per cent, the highest level since March 2001.

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According to experts, foreign portfolio investors will continue to invest in Indian markets. However, the result season and global events will keep the market volatile. Domestic markets are likely to continue their consolidation phase, they added.

Ruchit Jain, Lead Research, 5paisa.com, said since quarterly results are being announced, a lot of stock-specific volatility is seen, which would continue in the near term. As for derivatives data, FII’s have long positions in the index futures segment. “The options data hints at support at 19700 for the expiry day while open interest data is scattered in 19800-20000 call options.

The Fed event could have an impact at the open tomorrow but the broader trend remains positive and 19700-19600 will be seen as the immediate support range. Traders are advised to trade with the trend and look for stock-specific buying opportunities,” he added.

Gift Nifty at 19856 indicates a gap-up opening of about 40 points for Nifty. Mid and Small-cap will continue to see traction from traders and investors, said analysts.

The Fed rate hike is already been discounted by global markets. In fact, US stocks ended flat and equities across the Asia Pacific region are mostly up.

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Vikas Gupta, CEO, and Chief Investment Strategist, OmniScience Capital, said: “The core CPI remains high at 4.8 per cent even as the headline CPI is at 3 per cent. Unemployment remains at a 50-year low. Economy remains strong in terms of GDP growth. Given this background, the Fed has hiked the rates in the July meeting by 25 bps to the highest level since 2001. It has hinted at further increases if core inflation doesn’t come below 2 per cent soon.

However, it could skip the hike in the next meeting and do it in the one after that if core inflation is still not in the mandated zone. The Fed keeps its options open, assessing information and economic impact while searching for the right stopping point in the current tightening cycle to reach its inflation target.”

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