Analysts expect a short recovery in the NSE Nifty 50, which closed with a slight gain on Tuesday, as the technical indicators present mixed signals.
The daily chart indicates that the Nifty has formed an inside bar candle, according to Mandar Bhojane, research analyst at Choice Broking.
The non-directional activity through the day and the daily charts also indicates indecisiveness between the bulls and bears, said Shrikant Chouhan, head of equity research at Kotak Securities.
"The RSI at 43 suggested bearish momentum, while the Stochastic RSI showed a bullish crossover, hinting at a possible short-term recovery," Bhojane said. He added that it was important to stay vigilant as the markets lack a definitive directional bias.
The index has established an immediate support level at 23,470. This level has been tested successfully on multiple occasions. However, if the level is breached, the next crucial support will be at 23,270, according to Sujit Modi, chief investment officer at Share.Market.
The Bank Nifty also saw a positive day on Tuesday after a decline on Monday. The index has found support near its 250-day simple moving average and formed a bullish harami candlestick pattern, indicating strength, according to Hrishikesh Yedve, research analyst at Asit C Mehta Investment Interrmediates Ltd.
"While holding above 49,750 could enable a short-term pullback, a decisive break above 50,700 is required to trigger a stronger rally," he added.
FII/DII Activity
Foreign portfolio investors stayed net sellers for the second straight session on Monday and domestic institutional investors stayed buyers for the 14 consecutive.
FPIs sold stocks worth approximately Rs 2,575.1 crore and DIIs bought stocks worth Rs 5,749.7 crore, according to provisional data from the National Stock Exchange.
F&O Action
Nifty January futures up by 0.27% to 23,785 at a premium of 77 points.
Nifty January futures open interest up by 1.7%.
Nifty Options Jan. 9 Expiry: Maximum call open interest at 24,500 and maximum put open interest at 23,000.
Market Recap
The benchmark equity indices reversed two sessions of decline to close higher on Tuesday, helped by a broad-based rally led by oil and gas, and financials.
The NSE Nifty 50 ended 91.85 points or 0.39% higher at 23,707.9, and the BSE Sensex advanced 234.12 points or 0.3% to close at 78,199.11.
Major Stocks In News
Jindal Worldwide: Recommends issue of four bonus shares for each held.
Mankind Pharma: The company has pledged its remaining 56.31% stake in its arm, Bharat Serums, in favour of Catalyst Trusteeship.
Sapphire Foods: The company has received a GST order from the Bengaluru Tax Authority demanding Rs 81.45 lakh, including interest and penalties.
Berger Paints:The company has clarified that there is no material event or development to disclose regarding reports of it potentially acquiring Akzo Nobel's India stake.
Akzo Nobel: The company has clarified that it has not received any communication from its parent company regarding any events or negotiations. This follows reports suggesting that Berger Paints may be looking to buy Akzo Nobel's stake.
Mahindra & Mahindra (M&M): The company announced pricing for its electric vehicles. BE 6 top variant will be available at Rs 26.9 lakh, while XEV 9e top variant will be available at Rs 30.5 lakh.
Global Cues
Most stocks in the Asia-Pacific region traded lower on Wednesday after a tech rout in the US roiled Wall Street stocks on bets that the Federal Reserve won't cut interest rates. The selloff in US treasuries deepened.
Japanese markets opened lower with the benchmark Nikkei falling by 0.8%, or 308 points, to 39,774 as of 6:30 a.m. South Korea's Kospi was down 2 points, or 0.08%, at 8,490. Future contracts in Mainland China pointed to a positive start while those in Hong Kong hinted lower open.
Yields on 10-year Chinese sovereign bonds have tumbled in recent weeks to all-time lows, according to Bloomberg. This is despite a slew of economic stimulus measures announced by the government.
Australia's CPI data is due on Wednesday alongside the release of the US Federal Reserve's December meeting minutes, which may clarify the central bank's stance on rate cuts. Samsung Electronics Co.’s quarterly profit missed estimates and reported a operating profit of 6.5 trillion won ($4.5 billion) for the December quarter.
Meanwhile, US President-elect Donald Trump threatened Denmark with tariffs over Greenland. This comes after Trump denied a tariff plan that covered only critical imports.
The latest economic data on Tuesday showed job openings in the US rose to a six-month high in November, hinting at a strong economy and cutting rate cut bets. According to Bloomberg, traders who were fully pricing in another Fed rate cut by March cut down bets that there will be one until the second half of the year.
Treasuries saw a selloff on Wall Street with the benchmark 10-year yields climbing to 4.68%. The S&P 500 and the tech-heavy Nasdaq Composite fell 1.11% and 1.89%, respectively. The Dow Jones Industrial Average slipped 0.42%.
Crude oil prices rose for the second day. The Brent crude was trading 0.44% higher at $77.39 a barrel as of 6:50 a.m. IST, and the West Texas Intermediate was up 0.62% at $74.71.
Money Market
The Indian rupee strengthened 11 paise against the US dollar to close at 85.72 on Tuesday. The Indian unit had declined by four paise to a record low of 85.82 a dollar within one hour of the session as demand for the greenback persisted.
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