Domestic markets are expected to open on a flat note with a downward bias on Thursday. Despite a strong recovery on Wednesday, analysts said investors are still cautious due to the tariff war. Analysts expect stock-specific action will continue, and there will be some buying interest in beaten-down quality stocks.
Rajesh Bhosale, Technical Analyst, Angel One Ltd – Angel One said: “We continue to advise focusing on stock-specific opportunities rather than taking aggressive index-based positions to enhance outperformance. Additionally, with ongoing geopolitical tensions and concerns over tariff wars, traders should stay alert and avoid complacency as these factors may continue to influence market sentiment.”
Gift Nifty at 22,375 signals a slightly weak opening for domestic markets, as Nifty futures on Wednesday closed at 22,441. However, analysts expect the recovery will continue, expecting a slowdown in FPI selling and value buying at lower levels. FPIs turned net buyers for the first time after several weeks.
Volatility to persist: Emkay Global
Emkay Global Research expects volatility to persist in the short term. “We write from the middle of our US conference, even as tariffs are now spooking the markets. We maintain that these pressures will persist on the market through this quarter. The key to market recovery is earnings stability, and we expect FY26 forecasts to be resilient from here on. In the meantime, brace for extreme volatility to continue,” it added.
Breaking a 10-session losing streak, Nifty surged 254 points or 1.15%, to close at 22337 on Wednesday. Both midcap and small-cap indices gained alongside benchmark indices, with the Nifty Midcap 100 index surging 2.42% and the Nifty Smallcap 100 Index ending the day with remarkable gains of 3%. Advancing stocks overwhelmingly outnumbered declining ones, with the advance-decline ratio on the BSE reaching 4.24 levels—the highest since April 1, 2024.
Asian markets up
Global stocks are in a sea of green. Almost all equities across the Asia-Pacific region are up in early deals on Thursday following a strong closing at US stocks overnight.
“The Nifty managed to close above its 5-day exponential moving average (EMA) for the first time since February 6, 2025, potentially signalling a reversal from a bearish to a bullish trend in the short term. Resistances for the Index are seen at 22500 and 22700,” said Devarsh Vakil, Head of Prime Research, HDFC Securities
Despite the strong recovery, F&O trading signals a neutral stance, said analysts.
Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities, said: the derivatives market indicates a neutral stance, with balanced positioning by call and put writers, reflecting a cautious approach by market participants. Heavy open interest at the 22,500-call strike (1.20 crore contracts) reinforces it as a strong resistance level. “Conversely, substantial put accumulation at the 22,000 strike (1.31 crore contracts) underpins this zone as a robust support base. The 22,300–22,000 range is under considerable put writing pressure, while shifting call writing to higher strikes enhances the budding bullish sentiment. The Put-Call Ratio (PCR) moved up from 1.02 to 0.71, highlighting the improved market sentiment. Additionally, the Max Pain level at 22,400 suggests that despite volatility, bulls may continue to absorb declines in the near term,” he added.