Another indecisive day on the cards for the domestic bourses. Analysts expect the market to remain volatile at individual stock levels, while indices may remain in a range.
Gift Nifty at 22,590 indicates a flat opening for Nifty even as global markets provide mixed cues.
However, analysts expect buying at lower levels. The drop in volatility index indicates a fall in risk perception they added.
According to analysts, the liquidity enhancement steps undertaken by the Reserve Bank of India will give a much needed liquidity booster in the financial system.
- Also read: Stocks that will see action today: February 27, 2025
Derivative trends continue to reflect a bearish inclination, with call writers maintaining dominance over put sellers, signalling a defensive stance. A notable open interest build-up at the 22,700-strike call (1.50 crore contracts) cements it as a robust resistance zone, while a significant put accumulation at the 22,600 strike (1.11 crore contracts) establishes strong footing at lower levels, said Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities.
The brutal correction in the market continues, with renewed FPI selling, said Emkay Global Research in a note.
Key positives, according to Emkay Global: This kind of price damage creates its own negativity, but there are positive signs. “The RBI’s move to reduce risk weights for NBFCs and micro-borrowers is a big positive. This should enable banks and NBFCs to lend more aggressively in the retail segments, which would in turn aid the recovery in consumption. Also, the correction has de-frothed valuations, and the Nifty is attractively valued at below 22.5k (19.2x 1YF P/E). Financials is the best trade on the RBI easing, but we see this as an opportunity to lighten positions as valuations are still out of sync with medium-term growth. Our preferred sectors are Consumer Discretionary, Healthcare, and Telecom,” it added.
Osho Krishnan, Sr. Analyst, Technical & Derivatives of – Angel One, said: A fierce tug-of-war has unfolded between the counterparties, yet the bears continue to assert their dominance in the market. “The technical structure of the benchmark index remains the same, indicating a sustained bearish sentiment as we look ahead to the near term. This prevailing trend suggests a cautious view for market participants, with sustained uncertainties in the coming days,” he said.
The overall sentiment remained cautious, with traders refraining from aggressive bets, said Mandar Bhojane, Research Analyst, Choice Broking. “India VIX, a measure of market volatility, declined by 5.03 per cent to 13.72, reflecting reduced nervousness among participants. A lower VIX often signals stability, but in the current scenario, it also indicates indecisiveness, as the market struggles to find direction,” he said.
