The Indian domestic markets are starting the new week and month on a positive note despite mixed global cues. Analysts believe that economic indicators such as GDP, GST collection, and auto sales have met expectations. However, concerns remain due to continued selling by foreign portfolio investors.
The GDP number for the December quarter came in at 6.2 per cent, while GST collections stood at Rs 1.84 lakh crore. The Nifty is expected to open higher at around 22,370, signaling a gap-up opening of about 100 points.
Chief Economist of CareEdge Ratings, Rajani Sinha, expressed optimism about the growth momentum rebounding in the coming quarters. Factors such as recovering rural demand, lower tax burden, policy rate cuts, falling food inflation, and public capital expenditure are expected to support economic activity. Sinha expects GDP growth of around 7% in Q4 FY25 and 6.7% for FY26.
Despite the positive economic data, the market continues to face pressure from foreign portfolio investors who have been selling aggressively. Vipul Bhowar, Senior Director at Waterfield Advisors, pointed out that elevated valuations and concerns about corporate earnings growth have led to foreign outflows. The recent market sell-off has been influenced by global uncertainties such as rising US bond yields and a strengthening US dollar.
Technically, analysts believe that the market is weak with no visible signs of recovery. Choice Broking highlighted that Nifty 50 has corrected nearly 16% from its all-time high and is on a five-month losing streak. There is significant resistance at 22,500 and 22,800, with the highest Call Open Interest concentration. A breakout above 23,000 could trigger short covering and fresh buying, leading to a potential recovery.
In conclusion, while the economic data has been positive, the market remains cautious due to foreign outflows and global uncertainties. Traders are advised to adopt a sell-on-rise strategy and closely monitor key support levels until a decisive breakout occurs.
