Domestic markets are expected to open weakly in the new week, with little cues from global equities as the Japanese and Thai markets are closed today. Gift Nifty at 25,080 signals a marginal gain for Nifty. However, analysts expect the market to remain volatile due to unabated selling by foreign portfolio investors. The focus has now shifted to India Inc.’s financial performance for the September quarter. Reliance Industries, HCL Tech, and AngelOne are among the companies that will declare their quarterly results today.
K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said: This month, through 11th October FPIs have sold equity for ₹58710 crore. (NSDL) This massive selling didn’t seriously impact the market since the entire FPI selling has been absorbed by DIIs who are receiving sustained fund inflows. This trend of FII selling and DII buying is likely to sustain in the near-term.”
The recent increase in the US 10-year Treasury yield, driven by an unexpected rise in core inflation and ongoing geopolitical challenges, has prompted FIIs to shift towards more affordable markets. This trend is expected to affect equity asset performance in the short term, added Vinod Nair, Head of Research at Geojit Financial Services
According to IFA Global Research, the Nifty ended last week almost flat (0.2% lower). While it opened higher a couple of sessions, it was running into selling pressure and could not sustain gains. Broader markers, however, did better with Midcap (+1.3%), Smallcap (+1.1%) and Nifty Next 50 (+1%) indices ending the week higher. Pharma and Auto were the best-performing sectors, while metals and FMCG stocks were the laggards this week. The Nifty is currently trading at a P/E of 23.5 on a trailing 12-month basis, it said.
Krishna Appala, Sr. Research Analyst, Capitalmind Research said, Despite global uncertainties, growth projections for FY25 remain robust at over 7%, with liquidity keeping stress points minimal. “TCS’s Q2 results showed 7.6% revenue growth and a 5% rise in net income, though operating margins dipped slightly. The market remains watchful, as Nifty valuations appear stretched, and further muted earnings from large-cap stocks could trigger a consolidation phase before results catch up,” he added.
NSE derivative also signals a caution.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities, said: Bearish sentiment persists, with call writing outpacing put writing. This shows caution among traders as sellers maintain control. Significant open interest is concentrated at the 25,000 strike for both calls (59.63 lakh contracts) and puts (50.60 lakh contracts), suggesting a neutral to sideways bias.
“The activity between these levels reflects a tug-of-war between buyers and sellers, with a breakout likely determining the index’s direction. The put-call ratio (PCR) slightly increased to 0.75 from 0.73, maintaining a bearish bias with call writers in control. The max pain level remains at 25,300, a key pivot for upcoming moves.,” he added.
