After a strong pull back on Tuesday, Indian stock markets are likely to open on flat to negative note on Wednesday. Analysts expect consolidation to continue at lower levels, as Q2 results announced by corporates so far have been good despite macro headwinds. With below-par monsoon and inflation worries, analysts expect profit taking will cap market gains.
Meanwhile, Gift Nifty at 22,760 signals a gap down opening of 100 points.
Indian equity markets are likely to open on a cautious-to-steady note, with improving corporate earnings and recent strength in IT stocks providing some support, said Ponmudi R, CEO of Enrich Money,. However, rising crude oil prices amid escalating Middle East tensions remain a significant concern. WTI crude has moved towards the $95-per-barrel region, keeping inflationary and external-balance risks elevated., he said adding that continued uncertainty surrounding regional energy supplies could limit the sustainability of the domestic market recovery.
The ongoing earnings season will remain an important driver of sector-specific buying, as investors assess revenue growth, margins and management commentary, he further said. “However, the sustainability of the broader recovery will depend on whether earnings strength can offset persistent macroeconomic headwinds,” he cautioned.
Technically, the markets entered into consolidation phase.
Hitesh Tailor, Technical Research Analyst at Choice Broking, said: the overall market bias has improved to cautiously bullish following the strong recovery in Nifty and Bank Nifty. “Nifty’s bullish candle, close at the day’s high, improving RSI and broad-based sector participation indicate strengthening buying momentum, while the decline in India VIX suggests easing volatility. However, both indices need to sustain their recovery and overcome their respective resistance zones to confirm further upside. Near-term sentiment remains positive as long as key support levels hold, although intermittent profit booking cannot be ruled out,” he further said.
Asian stocks are ruling mixed in early deal on Wednesday.
Some of the prominent companies that announce results included Aditya Birla Money, Bajaj Consumer Care, Billionbrains Garage Ventures, (Groww), Canara Bank, CEAT, Bharat Heavy Electricals, ICICI Lombard General Insurance, Elecon Engineering, Emmvee Photovoltaic Power, HDB Financial Services, Hathway Cable & Datacom, Lloyds Metals and Energy, Mangalore Refinery and Petrochemicals and Tata Technologies