Sensex, Nifty flat amid weak global cues; volatility likely ahead of monthly expiry

Benchmark indices Sensex and Nifty 50 were flat-to-negative on February 29 morning trade amid weak global cues. Analysts expect volatility to continue through the day ahead of monthly expiry, with Nifty facing a strong resistance at 22,000-mark and suggested investors to wait for the volatility to subside before making investment decisions.

Sensex and Nifty declined up to 0.1 percent to 72,244 and 21,908, respectively on February 29. India VIX, which indicated volatility in the next few days was elevated above 16 level.

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"As prices gravitate towards 21,800, we expect recovery attempts during the day, which however are likely to be capped at 22,000 initialy. It would require a direct rise above 22,070 to signal reversal. Else expect downsides to resume," said Anand James, Chief Market Strategist, Geojit Financial Services.

Sameet Chavan, Head Research, Technical and Derivative - Angel One, too, expects upside potential to remain limited ahead of monthly expiry and any rebounds would lead into selling pressure. "The immediate resistance is anticipated around 22,050 - 22,100, while support levels to watch are near 21,875, followed by 21,700," he added.

Broader markets also faced selling pressure within the first hour of trade as Nifty Midcap 100 and Nifty Smallcap 100 indices declined up to 0.4 percent on February 29.

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Majority of the sectors fell in the morning trade, with Nifty Media being the worst hit as it dropped over a percent. On the flipside, Nifty Metal, PSU Bank, Oil & Gas, and Auto indices bucked the trend, managing to gain 0.1 percent each.

Global markets subdued; all eyes on US inflation report

Globally, US markets fell overnight as investors eye inflation report to understand Federal Reserve's interest rate cut trajectory. Dow Jones, tech-heavy NASDAQ Composite and the S&P 500 indices fell up to 0.5 percent. A higher-than-expected inflation print could dent risk-sentiment and signal reinforce concerns of higher-for-longer interest rates.

Meanwhile, Asia-Pacific markets were mixed this morning, with Japan's Nikkei 225, Topix declining up to 0.6 percent, while Australia's S&P 200 gained 0.1 percent, and Hong Kong's Hang Seng rose 0.6 percent.

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