Thanks to a strong closing at the US stocks for the second straight day, domestic markets are expected to see a positive opening on Friday. Analysts expect the market to remain in a consolidation phase, as efforts are high to arrive at a solution for the vexed US debt ceiling problem.
Strong FPIs flow
Analysts expect foreign portfolio investors continue to buy Indian stocks. ICICI Securities said, overall, FPI inflows since April 2023 till date have been strong at $4.6 billion, although MFs sold stock worth $0.8billion.
“Outlook, for FPIs improved significantly given the peak of the QT cycle in the US and India’s relative outperformance to global equities recently. The outperformance of the Indian equities has been driven by the reduction in valuation premium of India to EM indices over the past year and strong relative macroeconomics in terms of diminishing twin deficit risk (current and fiscal).”
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However, rising valuations will be the key risk to FPI inflows going ahead, it added.
SGX Nifty positive
SGX Nifty at 18,200 indicates a flat opening but in the positive zone. Nifty futures on Thursday closed at 18,175. Equities across Asia Pacific region are up in early deal on Friday, except Chinese markets.
Vinod Nair, Head of Research at Geojit Financial Services, said, “Positive developments in debt-ceiling negotiations in the US had a favourable impact on global market sentiments. However, the domestic market experienced a subdued mood in the latter half, mainly attributed to the mixed earnings reported by sector majors. India’s VIX at lower levels indicates market stability, instilling confidence in investors and encouraging long-term investment.”
SBI, ITC see profit booking
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, said Indian markets on Thursday were dragged as profit booking emerged in SBI and ITC despite posting strong results. These stocks had already seen up move in anticipation of better numbers. Nifty is struggling for the last three days and is finding hurdles at 18,300-18,400 zones.
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“Markets are likely to remain consolidative and take cues from global developments. Overall, we remain positive on the market and view the current decline as buying opportunity,” he added.