The last day of the first week of 2022 is likely to see a lacklustre beginning, following a flat closing in the US markets overnight. SGX Nifty at 17,850 indicates a positive opening for Nifty, as Nifty January futures last traded at 17,799.75. Experts believe the market will remain volatile in the next few days with the US Fed remaining firm on tightening its bond purchase programme and hiking rates.
The texture of the market is volatile and will remain volatile in the near future, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Asian markets are giving mixed signals with Australia’s ASX surging as high as 1.2 per cent, even as the Japan and Taiwan markets are down. Korea’s Kospi rose marginally.
Prashanth Tapse, Vice-President (Research), Mehta Equities, said the Street was a bit surprised as most of the Fed members agreed with the notion that quantitative tightening (where the Fed reduces its balance sheet) should start sooner and proceed faster than in past cycles.
“The preferred theme for Friday’s trade could be ‘desired consolidation’. The biggest make-or-break Nifty and Bank Nifty’s support are at the 17,601 and 37,001 mark respectively,” he added.
All eyes will be on FPIs’ strategy. After remaining buyers for four continuous days, they sold heavily on Thursday. According to exchange data, FPIs sold shares worth 1,926.77 crore.
Broader market to perform well
However, analysts are expecting stock-specific action and stocks from the mid- and small-cap space are expected to perform well .
Looking at the recovery on Thursday, one can expect the market to open and close on a positive note on Friday, said Rahul Sharma - Co-owner - Equity 99.
“Even after Thursday`s correction, we remain bullish on markets and expect good upside movement in mid and small caps in the coming days,” he said and added “the rise of Covid cases currently is not having a major impact on the market, but one has to be cautious.”
Deepak Jasani, Head of Retail Research, HDFC Securities, said: “Nifty fell as expected after a strong four-day upmove. However the advances-declines ratio is still at 1:1, suggesting broad market strength amidst selling in the index heavyweights.”