The Indian stock market is expected to open flat on Wednesday, with early indications from GIFT Nifty pointing toward a flat opening. The GIFT Nifty was trading at 26,206, down 7 points from its previous Nifty futures close. Global cues continue to provide a mildly positive backdrop.
On Tuesday, benchmark indices slipped for the third consecutive day. The Sensex declined by 503.63 points, or 0.59%, to end at 85,138.27, while the Nifty 50 closed 143.55 points, or 0.55%, lower at 26,032.20.
Most sectoral indices closed lower with declines in metal, oil & gas, private banks, media, and consumer durables.
The midcap index closed 0.22% lower, and the smallcap index dropped 0.55%. Sentiment was further dampened due to the NSE’s sectoral index reshuffle under SEBI guidelines, which weighed on major banking constituents.
Technical patterns imply a weak intraday setup for the Sensex after it formed a lower top and bearish candle on the daily chart.
The 85,000 level has become an important threshold. As long as the index stays above this zone, it may try to rebound toward 85,500-85,800.
If the index drops below 85000, the selling can increase, causing the index to be dragged closer to the 84500-84300 range.
The Nifty 50 Index is still showing indecisiveness after forming small red candles on both sides. The key pivot area on the downside remains at 26100 - 26200, while the long-term resistance level is at 26300. Only a sustained move above 26300 will trigger a possible rally to 26500.
Similarly, if sustaining below 26000, it will most likely continue to see profit taking and go towards 25900 - 25800. The Nifty options data is showing a significant amount of Call Write at 26100 and 26300, but also showing a lot of put open interest at 26000 representing a significant support zone.
Bank Nifty Closing Price was 59273.80 down 0.68% for the session on Tuesday and also displayed selling pressure from higher levels.
Analysts expect the Bank Nifty will trade within a range of 58500 - 60100 just before the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) meeting.
Support is likely to be in the 58300 - 58600 zone, and resistance probably in the 59600 - 59700 range. If able to sustain above 59700, then the Bank Nifty may move towards the 60200 - 61000 levels.
Market Sentiment is generally cautious due to lowered expectations for an immediate rate cut from the RBI due to strong GDP data and continued uncertainty related to the ongoing US-India trade discussions.
Analysts are suggesting that for now, the likely outcome will be consolidation, but once there is visibility here, then the long-term positive trend could resume.