Significant Near-Term Positives for Equity Markets? Key Nifty Levels in View

 By Malvika Gurung

Investing.com -- The domestic headline indices made a lower opening on Friday, with benchmarks Nifty50 slipping 0.16% at 17,830.15 points and Sensex losing 110 points or 0.2%. Most sectors traded in the red, led by consumer durables, healthcare and pharmaceuticals, while metal and PSU banking stocks provided support to the market. Index Nifty Bank dipped 0.19%.

In a note provided to Investing.com, Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services pointed out significant near-term positives for equity markets.

He said globally, the decline in US inflation to 6.5%, along with a consequent fall in US 10-year bond yields by 10% to 3.46% are supportive of equity markets. Further, the US dollar index dipping below 103 is positive for emerging market equity.

As a result, going ahead, the sustained selling by FIIs in India for the 15th trading session is likely to abate, as FII selling of Rs 1,662 crores was eclipsed by DII buying of Rs 2127 crores, said Vijayakumar. 

He noted that DIIs now have fundamental support coming from reduced CPI inflation and rising IIP numbers .

“RBI can now afford to soften rate hikes. The emerging interest rate scenario is favourable for banks and NBFCs. The impressive Q3 results from IT majors will keep the IT segment resilient,” the expert said.

On the Nifty outlook, Anand James of Geojit Financial Services said that despite Thursday’s brief slippage below the turnaround level of 17800 raising some panic, the pullback thereof encourages him to stay with the 18100 view, with plans of expanding to 18560, once above 18300. 

“However, avertical rise is less expected today and we would be cautious about rejection trades reappearing in the 17960-18020 vicinity,” he added.