Sensex and Nifty Anticipate Moderate Gains Amid Global Optimism

Domestic markets are poised to open moderately higher as global optimism permeates the market. Following President Donald Trump's encouraging remarks about tax cuts, US stocks reached record highs, contributing to a positive sentiment in various markets.

Pre-Budget Rally Expected

According to analysts, the Nifty is expected to gain approximately 40 points, as indicated by the Gift Nifty data at 23,300. With the crucial Budget session approaching in just six trading days, market participants are keenly anticipating a potential pre-Budget rally.

Rajesh Bhosale, a technical analyst from Angel One Ltd, noted that although the benchmark index has been relatively stagnant, traders should prepare for increased market activity soon. Broader markets have already shown robust performances, illustrated by the Nifty Midcap Select index, which has risen over 2%. Bhosale encourages traders to focus on sectors and stocks that are likely to excel in the lead-up to the Budget.

Nevertheless, there are caveats. The trading patterns in the Futures and Options (F&O) segment hint at some caution. According to Dhupesh Dhameja, a derivatives analyst at SAMCO Securities, the F&O landscape reflects uncertainty. The balance between calls and puts indicates indecision among traders. The open interest for the 23,250-strike call has surged to 2.21 crore contracts, marking it as a significant resistance level, while the 23,200-strike put has seen a notable increase of 4.04 crore contracts, forming a solid support level.

These contrasting movements between the 23,200 and 23,250 strikes illustrate an ongoing battle between bullish and bearish traders. The increase in higher-level call positions suggests that upward movement faces considerable challenges. The Put-Call Ratio (PCR), which stands at 1.05, indicates a cautiously optimistic market atmosphere.

The India VIX, which measures market volatility, reduced slightly by 0.46% to 16.69, suggesting a minor alleviation of market fears. However, historically, VIX readings above 15 tend to indicate increased volatility, often hinting at bearish sentiment throughout the market.

In addition, Asian markets are showing positive movements in early trading sessions on Friday.

Sensex, Nifty, Stocks