The domestic markets are expected to open with moderate gains on Friday, despite the prevailing optimism. This comes after US stocks closed at record levels following President Donald Trump’s comments on tax cuts.
The Nifty is expected to open at around 23,300, indicating a marginal gain of approximately 40 points. Traders are now focusing on the upcoming Budget, with analysts suggesting a possibility of a pre-budget rally.
Rajesh Bhosale, a Technical Analyst at Angel One Ltd, noted that while the benchmark index may seem subdued, market activity is expected to increase in the lead up to the Budget session. He highlighted the strength in broader markets, with the Nifty Midcap Select index surging over 2 per cent. Traders are advised to focus on sectors and stocks likely to outperform in this pre-budget rally.
Despite the optimism, the trading pattern in the F&O segment still signals caution. Dhupesh Dhameja, a Derivatives Analyst at SAMCO Securities, mentioned that there is uncertainty in the derivatives space, with balanced participation in calls and puts indicating indecision among traders. He pointed out key levels to watch, with the 23,250-strike call serving as a significant ceiling and the 23,200-strike put establishing a strong support level. The Put-Call Ratio (PCR) climbed to 1.05, reflecting a cautiously optimistic market sentiment.
The India VIX, a volatility index, edged lower to 16.69, suggesting a slight easing of market jitters. However, readings above 15 historically signal heightened market volatility, often indicating bearish undertones.
Asian stocks are trading higher in early deals on Friday, adding to the overall positive sentiment in the markets.
Overall, the markets are poised for moderate gains amid global optimism, with traders keeping a close watch on key levels and upcoming events like the Budget session.
