Flat opening seen ahead of Christmas holiday
Domestic markets are expected to open on a flat note on Tuesday ahead of Christmas holiday. Global markets are providing few cues, while GIFT Nifty signals a flat opening. Analysts expect volume to remain low. Select individual stocks, however, will see heightened activity ahead of the settlement of monthly contracts in the F&O segment on the NSE on Thursday. The market will remain closed on Wednesday due to Christmas.
Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher, said: “Investors are now focusing on the Reserve Bank of India’s forthcoming monetary policy and the Union Budget 2025, anticipating policy measures that could further support economic growth and market stability. Over the next few days, trading volumes are expected to be thin due to this being a holiday-shortened week.”
Osho Krishnan, Sr. Analyst, Technical & Derivatives of – Angel One, said: “The placement of Nifty certainly portrays tentativeness with price closing below the significant pivot zone of 200 DSMA. Additionally, the market breadth remained tilted towards the Bears, highlighting the prevailing bearish sentiment in the market.”
“Going forward, it is advisable to exercise caution and not get overly enthusiastic about temporary reliefs. Strong risk management is wise when considering recent developments,” said Osho Krishnan.
Meanwhile, Emkay Global Research, in an India Strategy note, said: A strong market and enhanced flows have pushed the share of equities in HH domestic savings nearly 2x to about 31 per cent since FY16, per our estimates. “Indian markets are, therefore, more resilient to FPI sell-offs and the trend is here to stay. We see lower fixed-income yields, among other factors, continuing to push savers toward equities for another 8-10 years. Domestic MFs are more exposed to SMIDs than FPIs, and are taking more active sector bets. We believe this will continue driving SMID outperformance and be a drag on heavyweight sectors like Financials and Staples,” it added.
Volatility update
India VIX, an indicator of market volatility, inched up by 0.96 per cent to 14.51, indicating rising caution among traders. However, with the VIX remaining below the critical 15-level, there is room for guarded optimism, though a sustained recovery appears challenging, said Samco Securities.