Markets seen opening flat to positive amid mixed global cues, weak IIP data

Derivative trading indicates a shift towards bullish sentiment, with put writers increasing positions significantly. I
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Domestic markets are expected to open flat to positive on Tuesday amid mixed global cues. Weak IIP data and mixed corporate results will keep the market under pressure, analysts said. However, heavy buying by foreign portfolio investors and domestic institutions will keep the market in a consolidation phase.

Aditi Nayar, Chief Economist & Head – Research & Outreach, ICRA Ltd, said: “The IIP growth for March 2025 came in slightly lower than our forecast of 3.3 per cent. It is possible that the lower response rate associated with the preponing of the data release has dampened the estimated growth rate, which may subsequently undergo a relatively larger revision as compared to that seen in the past.”vIn sequential terms, the improvement in YoY growth of electricity and mild uptick in that of manufacturing was offset to a large extent by the dip in the growth of mining, she said adding:  Looking ahead, while there is some evidence as well as commentary around frontloading in exports to the US, we need to see whether this is driven by redirection away from other geographies or a bump up in output in the ongoing month.”

Meanwhile,Kotak Institution Equities, said: The recent rebound in the market reflects some degree of complacency and optimism in the market with respect to global growth and domestic earnings. “In our view, there is still large uncertainty on key issues (global growth, tariff/trade, US dollar) that will shape global and domestic markets and optimism on earnings in the market.

“The fact that the market is trading above “Liberation Day” levels would suggest that all issues have been fixed. In reality, flobal and domestic GDP growth will be likely lower, the reciprocal tariff and trade issues will take a long time to resolve, earnings have been cut further and multiples continue to be rich across sectors and companies; even large-cap. financials are reaching fair valuations,” it cautioned.

Derivative trading indicates a positive outlook, said analysts.

Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said the options setup reflects a gradual transition in market sentiment from cautious to confident. “Put writers have expanded their positions aggressively, overtaking call writers — a positive sign for bullish bets. The 24,500 strike has seen a heavy open interest addition (1.06 crore contracts), establishing it as a near-term resistance ceiling. Simultaneously, the 24,000 strike has witnessed robust put writing (1.24 crore contracts), offering a strong support floor just below the current levels.”

“ The Put-Call Ratio (PCR) has risen sharply to 1.17 from 0.70, suggesting a noticeable shift towards bullish sentiment. Max Pain remains centred at 24,200, implying a range-bound bias for now, with an upward tilt capped unless a breakout materialises,” he added.

India’s VIX eased 1.27% to 16.94, reflecting a marginal reduction in volatility. However, given the global macro cues, volatility could spike unexpectedly. Although the VIX remains in a manageable band, its stay above the psychological 15 mark suggests that traders should remain vigilant for erratic intraday swings and whipsaws, he further said.

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Published on April 29, 2025