Sensex and Nifty Poised for Moderate Gains Amid Global Optimism

Domestic stock markets are anticipated to open slightly higher on Friday, buoyed by global trends and growing optimism. A significant factor contributing to this positive sentiment is the recent performance of US stocks, which closed at record highs following comments from President Donald Trump regarding potential tax cuts.

The GIFT Nifty index suggests a modest gain of around 40 points for the Nifty, signaling traders' expectations of a pre-Budget rally. As the market gears up for the upcoming budget presentation, analysts are closely monitoring market movements.

Market Insights and Technical Analysis

Rajesh Bhosale, a Technical Analyst at Angel One, commented on the current market conditions, noting that while the benchmark index remains somewhat subdued, there is an expectation of increased activity as the pivotal Budget session approaches within just six trading days. Bhosale highlighted that broader markets have showcased strong performances, particularly noting a rise of over 2% in the Nifty Midcap Select index. He advised traders to focus on sectors and stocks that are likely to outperform leading up to the budget announcement.

Trading Activity and Market Sentiment

Despite the overall optimism, analysts are urging caution due to existing patterns in the futures and options (F&O) segment. According to Dhupesh Dhameja, a Derivatives Analyst at SAMCO Securities, there is a prevailing uncertainty reflected in the balanced trading of calls and puts, indicating a lack of consensus among traders. He pointed out that the open interest for the 23,250-strike call options has risen to 2.21 crore contracts, establishing it as a significant resistance level. Conversely, a substantial increase in open interest for the 23,200-strike put, which reached 4.04 crore contracts, has set a strong support base.

The active trading between these strike prices signals a battle between bullish and bearish market forces, complicating any upward price movement. The Put-Call Ratio (PCR) has climbed to 1.05, suggesting a cautiously optimistic sentiment among market participants.

In terms of market volatility, the India VIX has seen a slight decline of 0.46% to 16.69, which indicates a possible easing of market fears. Typically, VIX levels above 15 are considered to signify increased market volatility, which can often indicate bearish sentiments.

Meanwhile, Asian stock markets have also shown strength in initial trading sessions on Friday, contributing to the overall positive market environment.

Sensex, Nifty, Market, Budget, Optimism