The weak dollar index has led to strong FII flows in the emerging markets, particularly in India. Indian equity markets have witnessed an inflow of over Rs 1,28,000 crore in the last few months with record inflow seen in the month of November 2020.

When we talk about the performance of markets in 2020, the first thing that strikes in mind is the word 'comeback' as markets have made a strong comeback after a severe crash. Wednesday was no different as markets did make a strong comeback and ended near the high point of the day. However, the milestone of 14,000 still seems so near yet to so far on Nifty. 

D-Street bulls seemed unstoppable on Tuesday as they continued to grind higher for the fifth successive day. However, the only regret was that despite having a super start to the day, they failed to touch the milestone of 14,000 levels. Nevertheless, it seems that today, they would finally touch the 14,000 mark as SGX Nifty indicates a wonderful start for the markets (up by 0.44 per cent). 

Tracking solid cues from their western counterparts, the Indian markets are expected to open with glory on Friday as in the overnight development, all the three major indices on Wall Street ended at record highs. SGX Nifty trades up by 16 points at 13,760 levels. 

On Wednesday, Indian markets displayed a strong performance as Nifty witnessed a breakout of the consolidation range while the key benchmark indices ended the day at record highs. However, on Thursday morning, SGX Nifty is indicating a soft opening as the global cues are not encouraging. SGX Nifty was trading down by 17 points at 13,668 levels.

Tuesday was all about the turnaround on D-Street as the key benchmark indices reversed their losses and eked out modest gains. In the current scenario, the bulls seem to have conditioned to buy a dip and there is no point in fighting the trend.

Even though the markets ended in green on Monday, volatility was the hallmark of the session as India VIX rose by 3.25 to 19.40. Further, multiple indecisive candle formations on the daily chart signalled that the dominant bulls are witnessing a slowdown in their pace of ascending.

In the last week, volatility was witnessed on the Indian shores, especially in the last trading session of the week as the market swung both ways before settling the day with modest gains. The extinct bears had attempted all tricks in the books to make a comeback but all efforts were in vain as the mighty bulls were backed by the strong liquidity gush by FIIs.

Friday is a new day and the bulls are expected to start with fresh energy. SGX Nifty is indicating a positive start as it was trading up by 10 points at 13,534 levels. However, we believe that consolidation could be the theme of the day with stock-specific movement, as markets in the recent past have run up too much, too fast; so, a healthy consolidation is likely to take place and it may continue its rally post a required consolidation. 

On Thursday, the bulls are likely to take a pause as the global cues are negative and SGX Nifty is indicating a fall of 58 points at the opening bell in Nifty. It would be interesting to see whether the market participants grab this initial dip as a buying opportunity like they have done in recent times and would the foreign portfolio investors also latch on to this opportunity and keep markets afloat or not. We do believe this dip will have takers as long as Nifty sustains above the 13,400 mark.