After a long weekend, domestic markets are poised for a positive start. Analysts anticipate further consolidation in the fresh week with buying activity at lower levels and positive macroeconomic indicators. The Gift Nifty at 22,555 indicates a gap-up opening of 100 points for Nifty.
Ajit Mishra, SVP, Research, Religare Broking Ltd, pointed out that all eyes are on the US Federal Reserve’s upcoming monetary policy review on March 19. While recent inflation data shows a favorable trend, the uncertainty surrounding interest rate cuts due to trade tensions remains. The commentary from the Federal Reserve will be crucial. Mishra also mentioned that market participants are closely watching FII activity, as selling pressure from foreign investors has picked up again. Any improvement in this area could ease some pressure on the markets. Mishra advised caution in the broader markets due to heightened volatility, suggesting investors avoid aggressive positions in mid and small-cap stocks.
On a global scale, equities across the Asia-Pacific region are trending higher following strong gains in US stocks on Friday. Vinod Nair, Head of Research, Geojit Financial Services, highlighted that uncertainties in global trade and the possibility of a US recession could impact domestic market momentum. However, moderating valuations, along with factors like falling crude oil prices, a weakening Dollar Index, and expectations of improved earnings domestically, may help stabilize the market amid trade uncertainties. Nair also mentioned that upcoming data releases on China’s retail sales growth and industrial production will shed light on the Chinese economic outlook, while US retail sales and production figures will also be closely monitored by investors.
Derivative market trading suggests stability for benchmark indices. Choice Broking noted that call OI is highest at 22,500 and 22,600, indicating strong resistance, while put OI is highest at 22,300, marking a key support level. Traders are advised to be cautious and practice strict risk management amid ongoing global uncertainties.
Overall, the positive sentiment in global markets and the expected stability in domestic markets offer a hopeful outlook for the week ahead. The upcoming developments in the US Federal Reserve’s monetary policy review and economic data releases from key countries will play a significant role in shaping market trends moving forward.
