Equity markets are expected to open on a flattish to positive note on Wednesday amid mixed global cues. Gift Nifty at 23,030 indicates a margin gain of about 40 points for Nifty at open. The mood is still downbeat among participants with Q3 results from India Inc so far either on expected lines or below market expectations. The focus has now shifted to two major events – FOMC meeting scheduled tomorrow and Union Budget 2025 on February 1.
The unabated selling by foreign portfolio investors and the bloodbath in the mid and small-cap segments is a cause for concern, investors said.
“We expect the market to trade in a range-bound manner, ahead of the US Fed interest rate decision on Thursday and the Union Budget announcement on Saturday.,” said Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd.
F&O trading also indicates a bearish signal, said analysts.
Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities, said in the derivatives market, bearish undertones persist, with call writers outnumbering put writers. Open interest at the 23,500-strike call swelled to 75.75 lakh contracts, solidifying it as a stiff resistance zone. “On the flip side, the 23,000-strike put witnessed a significant build-up of 1.03 crore contracts, highlighting it as a strong support level. Heavy put additions between 22,700 and 23,000 indicate a robust base, while unwinding at higher strikes reflects optimism among traders. The Put-Call Ratio (PCR) rose to 0.88 from 0.67, signalling improving sentiment. The “max pain” point at 23,200 suggests limited downside in the short term. However, volatility remains a concern, keeping traders cautious,” he added.
India VIX, the volatility index, edged higher by 0.34% to 18.19, reflecting heightened market uncertainty. “Historically, VIX levels above 15 signals increased volatility and bearish sentiment. With VIX hitting an 8-week high, traders should prepare for potential market turbulence,” he warned.
Osho Krishnan, Sr. Analyst, Technical & Derivatives of – Angel One, said, “At present, the heightened volatility remains a significant concern, with small and mid-cap stocks being the primary victims. It is essential for traders to remain vigilant and assess potential strategies to navigate this landscape effectively,” he cautioned
