Domestic markets are expected to open on a cautious note on Friday as well, given the mixed global cues. Gift Nifty at 22,540 signals a gap-down opening of about 140-150 points for Nifty at open. Analysts expect lacklustre participation from investors due to lack of triggers. The low level participation from domestic investors will keep the market under pressure due to lack of buying.
As the domestic fundamental also remained weak, Indian markets are expected to remain volatile with downbeat sentiment. Asian stocks were sharply lower in early deals on Friday on tariff war fears.
In a fresh move, the US President Donald Trump has said 25 per cent duties will be slapped on imports from the European Union and reiterated that tariffs on imports from Canada and Mexico will come into effect on March 4. Also, goods from China , will be subject to an additional 10% duty, he said sending global equities topsy-turvy.
According to InCred Equities, with local and global macro challenges in the short term, “we cut FY26F bull-case probability to 5% (from 10% earlier) and raise bear-case probability to 45% (from 40%). “
The financial service firm said: “Building in Nifty-50 Bloomberg consensus EPS cut, we have reduced our blended Nity-50 target marginally to 22,850, an upside of 2%, by the end of March 2026F. In a bear-case scenario, we maintain an 8% downside from current levels. We continue to prefer large-cap stocks,” it added.
Meanwhile, technical and derivatives analysts also remain cautious about market recovery.
According to Bajaj Broking Ltd, technically, Nifty has formed a small bear candle with a lower high and lower low signalling continuation of the corrective decline. “Nifty on Thursday almost tested the support area of 22,500-22,400 post breakdown below the January low (22786). The daily and weekly oscillators in the Index are placed at an extreme oversold territory. Hence, we expect the index to consolidate in the range of 22,400-23,000 in the coming sessions,” it added.
Bank Nifty started the session on a positive note and, thereafter, consolidated in a narrow range at midsession. However, it gave up most of its gains in the last hour to close marginally higher at 48,743.80, up by 0.28%. “Key support is placed at 48,300-48,000 levels, which aligns with the bullish gap from January 28, 2025, and the 80% retracement of the recent uptrend (47,844–50,641). Holding above the same can lead to a pull-back towards 49,500-49,600 levels in the coming sessions,” it further said.
Hardik Matalia, Derivative Analyst, Choice Broking, said: The India VIX declined 2.97 per cent to 13.3075, reflecting reduced market volatility and a decrease in fear among traders. This indicates improved investor confidence and a more stable trading environment, he said.. Open Interest (OI) data shows the highest OI on the call side at the 22,600 and 22,700 strike prices, highlighting strong resistance levels. On the put side, OI is concentrated at the 22,500 strike price, marking it as a key support level, he further added.
Derivative trends maintain a bearish bias, with call writers continuing to overpower put sellers, signalling a defensive stance, said Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities.
A substantial open interest accumulation at the 23,000-strike call (54.86 lakh contracts) cements it as a formidable resistance zone, while significant put accumulation at the 22,500-strike (50.54 lakh contracts) establishes a solid base at lower levels. The 22,600–23,000 range remains under heavy call writing pressure, whereas rising put activity at lower strikes signals an ongoing tug-of-war between bulls and bears, highlighting market fragility, he said a,dding the Put-Call Ratio (PCR) climbed to 0.78 from 0.63, hinting at a marginally improving sentiment, but sellers remain in control despite sporadic buying attempts. “Meanwhile, the ‘Max Pain’ level at 22,600 suggests that while volatility persists, buyers may attempt to cushion declines in the short term,” he further added.
