According to SGX Nifty, the new week is likely to open with a positive trend for the domestic market. Market sentiment is likely to remain positive on strong GDP and PMI (manufacturing and services) numbers. However, global markets are still negative in opening deals on Monday, and could see a downside correction as the day progresses, with foreign portfolio investors unreliable in their sell-offs, analysts said.
India’s annual GDP growth stood at 8.4 per cent in the second quarter of FY12.
Santosh Meena, Head of Research, Swastika Investmart Ltd, said volatility is likely to continue amid Omicron uncertainty, RBI credit policy and macroeconomic numbers. “There is a lot of news coming out on the Omron version which is creating volatility in the market, while on the domestic front we will have a significant credit policy result from RBI which is scheduled on 8th December.”
SGX Nifty at 17,268 (7.40 am IST), indicating a flat-to-positive opening for Nifty, as Nifty December futures closed at 17,239 on Friday. However, shares in Asia-Pacific are trending in the red, albeit marginally between 0.10 per cent and 0.60 per cent.
Focus on RBI meeting
“It will be important to see how the RBI balances Omicron’s growing fears, strong growth, high inflation and the US Federal Reserve,” he said.
According to K Vijayakumar, chief investment strategist at Geojit Financial Services, stretched valuations, bullish Fed comments and concerns over inflation and the potential impact of the Omicron variant on economic activity and corporate earnings are factors influencing FPI activity.
“In early November, several large foreign brokerages downgraded India from overweight to neutral at stretched valuations. Even after the recent correction, Nifty is trading at 20 times FY23 earnings, up from a historical average of around 16. So, FII sales may continue, albeit at a slower pace,” he said.
PMI Activity
India’s continued economic revival after the second Covid wave continued to be reflected in manufacturing PMI, with the index reaching a 10-month high of 57.6 in November-21, from 55.9 in October-21, higher than its longer time average. remained above 53.6. PMI services stood at 58.1 in November-21 as compared to 58.4 in October-21 on the back of improving demand conditions in the domestic market, reopening of establishments and increased marketing efforts.
Rating agency Acuite Ratings and Research said, “Overall, we expect that amid the complete removal of lockdown restrictions, reduction in infections, improvement in consumer sentiments and steady progress on immunizations, we expect to achieve PMI in the remainder of FY22.” We expect manufacturing and services to remain strong.”
According to experts, the only thing that is certain in the current market situation is volatility. He cautioned the traders to be cautious, as the stock price can fluctuate, resulting in huge losses in a matter of minutes. It is better to stay away from day trading during this period, he added.
,