Sensex, Nifty to open on a weak note

Despite solid results from Infosys and Reliance Industries, domestic markets are expected to open on a muted note on Friday. Gift Nifty at 23,325 signals a marginal loss of 40-50 points for Nifty at open. Cues from global markets are also weak, with Japan and Korean markets down.

Mandar Bhojane, Research Analyst, Choice Broking, said: The India VIX, a barometer for market volatility, increased by 1.36 per cent to close at 15.46, reflecting heightened market uncertainty. Derivatives data showed the highest call open interest (OI) at the 23,350 and 23,500 strike prices, while the highest put OI was concentrated at the 23,300 strike price. This indicates potential resistance at 23,350 and a bullish bias if the Nifty sustains above this level in the coming sessions. 

Overall, the market remains poised for directional movement, with global cues and corporate earnings acting as key triggers, he added.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said risk-on sentiments were sparked by cooler-than-expected US CPI inflation data for December, easing concerns about rising inflation and boosting expectations that the Fed might continue its rate-cutting cycle throughout the year. This, coupled with a weaker US dollar (now at 109) and a drop in the 10-year US bond yield to 4.65%, has further strengthened investor confidence. 

“While Nifty has seen a three-day recovery, it remains below its 200 DMA at 23,963, with key support at 23,000.,” he said. Traders will be closely monitoring upcoming catalysts, including the FOMC meeting and Delhi Assembly elections, he added.

The derivatives landscape reveals a cautious stance among market participants, with call-writers asserting dominance, said Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities. Open interest at the 23,300-strike call ballooned to 2.78 crore contracts, emphasising this level as a key resistance point. “Concurrently, the 23,300-strike put saw an accumulation of 2.38 crore contracts, establishing critical support at this level. Notable activity between the 23,300 and 23,500 strikes underscores a tug-of-war between bulls and bears. The mounting call positions signal a tough barrier for upward moves,” he added.

The Put-Call Ratio (PCR) eased slightly to 0.71 from 0.72, reflecting a cautious yet stabilising market tone. Meanwhile, the “max pain” level at 23,300 points to minimal downside risk in the near term., he further said.