How do you see the stock markets panning out for Friday 29th April? Do you see a weekend correction in the markets?

The sharp bounce on Thursday was largely led by short covering on F&O expiry day as was evident from the heavy volumes. On Thursday, the Nifty closed with gains of 206 points while the Sensex closed with gains of 701 points. HDFC Life and Hindustan Unilever reacted positively to the results while Bajaj Auto corrected on the back of disappointing Q4 results.

In terms of the market structure on Thursday, the breadth of Nifty was strongly positive at 45:4. However, the volatility index or VIX tapered to 19.38 levels, which is a good signal for the market. With the LIC IPO details announced, the focus shifts to how the IPO pans out when it opens for subscription on 04th May. Markets will worry ahead of the Fed meet.

FPIs bought Rs.743 crore and domestic funds and LIC bought stocks worth Rs.781 crore on Thursday. The huge volumes show good deal of fresh cash-futures arbitrage on expiry. Globally, the Dow gained 615 points while NASDAQ gained 383 points ahead of key Fed meet. European markets were 1% higher while SGX Nifty is 50 bps higher in early trades.

Based on the SGX Nifty indications, you can brace for a strong opening on Friday. However, worries over the overhang of the LIC IPO and the Fed meet next week could put pressure. IN addition, Friday is the last day of the week, and traders will be unwinding positions. The surge in fresh cash-futures arbitrage positions on Thursday remains a positive signal.