Equities are expected to maintain their upward momentum due to positive global sentiment and short-covering by foreign portfolio investors, according to analysts. Foreign portfolio investors turned buyers on Tuesday after 22 consecutive selling sessions, suggesting a potential slowdown in their selling activity. The Nifty is expected to open around 23,850, indicating a gain of approximately 75 points.
Market analysts anticipate that the market will trade within a narrow range with increased intra-day volatility, with a focus on upcoming events such as the RBI rate decision meeting and global factors. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, believes that the market will gradually climb higher, with attention on global markets, Q3 corporate earnings, and the outcome of the RBI MPC meeting.
Rajesh Bhosale, a Technical Analyst at Angel One Ltd, warns that ongoing geopolitical tensions and trade wars may continue to impact market volatility. Additionally, domestic factors such as the MPC outcome and the Delhi state elections will play a significant role in shaping market sentiment.
While the earnings season for Q3FY25 is nearing its end, India Inc. has largely met expectations, according to analysts. However, forward earnings revisions remain weak, with more downgrades than upgrades indicating potential challenges for corporate profitability.
Despite recent market corrections, valuations remain high, as noted by analysts at Motilal Oswal Financial. The Nifty’s P/E ratio is slightly below its long-term average, but valuations across sectors are still elevated compared to historical levels.
In the Asian markets, stocks are trading positively following a strong overnight performance in the US markets.
Published on February 5, 2025.
