The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open higher on Wednesday amid mixed global cues.
The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading around 24,245.50 level, a premium of nearly 40.5 points from the Nifty futures’ previous close.
The Sensex and Nifty 50 paused their two-day rally on Tuesday, reflecting some challenges in the global market, particularly amid concerns regarding tariff threats from US President-elect Donald Trump.
In a day marked by volatility, the Sensex experienced a modest decline of 105.79 points, or 0.13%, closing at 80,004.06. During the trading session, it reached 79,798.67, down by 311.18 points or 0.38%.
Vinod Nair, Head of Research at Geojit Financial Services, emphasized that the domestic market has paused following a recent strong rally; however, the broader market remains dynamic. Foreign Institutional Investors (FIIs) have shifted to being net buyers, ending a long period of selling, partly due to MSCI rebalancing.
As the state elections conclude in 2024, the government's focus will shift towards execution and fulfilling budget plans. The outlook for inflation has improved, driven by expectations of robust agricultural production, which is likely to benefit both the central bank and the stock market through a reduction in food inflation.
According to Rupak De, Senior Technical Analyst, LKP Securities, Nifty 50 remained range bound for the second consecutive session, confined between the 21 EMA and the 55 EMA. In the short term, the trend remains positive, with a "buy-on-dips" strategy favouring traders. On the lower end, 23,950–24,000 might act as crucial support levels, while 24,500 could act as a key resistance level. A decisive move above 24,500 might trigger a further sharp rally.
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas observed that minor degree pullbacks towards support zone 24,070 – 24,050 should be considered as a buying opportunity.
According to analysts, Bank Nifty also consolidated after a positive start. The hourly momentum indicator has a negative crossover and thus we expect the consolidation to continue over the next few trading sessions. A dip towards the support zone 52,000 – 51,800 should be considered as a buying opportunity. On the upside, immediate hurdle zone is placed at 52,600 – 52,800.
“A clear expansion of the Bollinger band on the daily chart is visible, indicating a likely move on the upside. It can be continued to hold the view of the index to buy on the dips until the 51,500 level is intact. Options writer's data of monthly expiry showed increased writing in the puts of 52,200 and below and a short covering in the call writing of the 52,000 levels, indicating an upside in the index,” said Praveen Dwarakanath, Vice President of Hedged.in
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