Sensex, Nifty set for gap-down opening amid global uncertainties
Gift Nifty at 24,545 signals another gap-down opening for domestic markets on Friday. Analysts expect the market to remain shallow, and activity will be catered around a few counters. They added that sector and stock rotation will keep the benchmark indices afloat.
The lacklustre trend is likely to continue, as “there is lack of confidence amongst investors due to global uncertainty, rising US bond yields fuelling fund outflows, and persisting conflicts in the Middle East and West Asia,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd
Meanwhile, mixed economic data keeps analysts on the edge.
India’s November inflation came in at 5.48, lower than market expectations. October’s IIP came in as per expectation, 3.5%. “Lower Inflation and industrial output data will help improve market sentiments given the worries over slowing economic growth”, said Devarsh Vakil – Deputy Head of Retail Research at HDFC Securities.
Madhavi Arora, Chief Economist, Emkay Global Financial Services, said even with no surprises on the Nov CPI print and sequential easing seen in perishable food items, the food inflation stays uncomfortably high at about 9 per cent on an annualised basis and is lending pressure to the headline print to stay above 5 per cent. Sequential easing in Core cpi inflation, on the other hand, continues to depict weaker domestic demand, led by a negative output gap. “We maintain our FY25 forecast at 4.9% with 4Q easing to an average of ~4.75%. However, the inflation easing head does not guarantee a deep, linear rate cut cycle. The The policy trade-offs are getting acute with tricky and small window of conventional rate cuts as global dynamics turn more fluid. Besides, mounting FX pressures and increasing cost of FX intervention will need to be weighed before cutting rates deeply ahead. We do not, for now, rule out a cut in Feb-25, but would be more comfortable taking a firm call closer to the policy window, esp. with new MPC in order. We also keep a watch on unconventional easing measures, specifically the gradual easing of regulatory lending norms ahead, to re-spur the waning credit offtake,” she added.
Meanwhile, most equities in Asia-Paciric regions are ruling in the negative.
