Sensex, Nifty likely to open on flat note

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Domestic market is expected to open on a flat note on Monday, tracking mixed global cues. Analysts expect the market to remain volatile during the day due to selling by foreign portfolio investors and domestic institutions’ counter buying. Truncated week (market is closed on Thursday on account of Ramzan Id) is likely to keep local participation low. Besides, as the election process kicked in, analysts expect that investors will remain on wait-and-watch mode.

Focus on India Inc

After RBI’s status-quo stance on interest rates, the focus has now shifted to India Inc’s performance and global cues.

According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, there have been big swings in the US bond yields due to expectations of rate cuts by the Fed.

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“The year started with market discounting six rate cuts in 2024 and consequently the yields drifted down. Then the market started factoring in only three rate cuts since the US labour market continued to be tight. Now many experts think that there may be only two rate cuts and these will be back loaded in 2024,” he said.

Gift Nifty (22,660), in comparison to the Nifty April futures (22,595), signals a positive bias but analysts feel the market may swing wildly.

US yields

Consequently, the US 10-year yield has spiked to 4.4 per cent. This will impact FPI flows into India in the near- term. However, FPI selling will be limited, despite the high US bond yields since the Indian stock market is bullish and has been setting new records consistently, he further said.

An important trend in FPI activity is the big selling in the FMCG segment and big buying in telecom and realty.

Joseph Thomas, Head of Research, Emkay Wealth Management, said, “Domestic markets registered gains for the week gone by as they received support from strong macroeconomic data in the form of PMI numbers. 4

“At the current juncture, the earnings season, too, is expected to register satisfactory growth. The expectations on growth were seconded by RBI in its policy by way of strong projections for FY25. The domestic news flow is fairly supportive of the market sentiments. The volatility may largely induced by global developments, specifically, expectations around the timing of the US Fed rate action,” he added.

Equities across the Asia-Pacific region are mixed. While Japan, Australia, Korea and Taiwan markets were up, Singapore, China and Hong Kong were down.