Indian stock markets are likely to open positive on Friday, indicates global markets. SGX Nifty suggests Nifty may regain 16,000-mark or about 2 per cent gain. SGX Nifty is currently ruling at 16,010, while Nifty futures on Thursday closed at 15,769.45.
Despite the US stocks closed in the red, equities across Asia-Pacific region are up in early trade on Friday. Benchmarks in the region are up between 0.6 per cent and 1.8 per cent, signaling strong buying at lower levels. Overnight, the US indices closed lower between 0.3 per cent and 0.8 per cent.
Will shorts be forced to cover?
Ruchit Jain, Lead Research, 5paisa.com, said: “This broad market sell-off certainly indicates a strong grip by the bears which could continue in the near-term.”
Analysts are expecting the market to stabilize at current levels as they see slowdown in FPIs selling going forward.
PR Sundar, veteran investment advisor (options trader and trainer), has tweeted: “That there was a huge discount in Nifty future over spot. In the past, whenever this happened, markets moved higher in next few days. Reason: Majority are in short, any good news, huge short covering. But this time fingers crossed. “
Time to buy?
Arun Malhotra, Founding Partner & Portfolio Manager, CapGrow Capital Advisors, said, “The long-term investors should focus on the large caps since a lot of value has emerged because prices have been coming down, while results and outlook have been strong . Volatility is the best friend for long-term investors. This downward spiral in prices of good quality scrips is giving a wonderful opportunity to own quality businesses at reasonable valuations. ”
Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities, said: “While we remain open to pullback rallies in the very near-term, we expect the downtrend to continue. The bears would gain more control once the recent intermediate low of 15735 is broken. ”
May 20, 2022