A day after a break, domestic markets are likely to open on a positive note on Wednesday amid positive global cues. The sentiment turned positive after the US President Donald Trump said India and the United States are close to finalising a trade deal after more than a year of negotiations.
Gift Nifty at 23,012 signals a flat to positive opening.
All eyes on earnings
The focus will be on Q2 results to be announced by companies. So far, the performance has been mixed. While IT and other sectors have performed well, private banks have posted a weaker-than-expected numbers.
Ponmudi R, CEO of Enrich Money, said optimism surrounding a potential India–US trade deal could offer some support to domestic equities, but a sustained recovery may prove difficult as elevated crude oil prices, rising global bond yields and persistent geopolitical uncertainty weigh on investor sentiment. WTI crude is trading around $98–99 a barrel, while Brent is hovering near $110, keeping macroeconomic risks firmly in focus.
“Developments involving Iran and the Strait of Hormuz remain a key source of uncertainty for global markets. Any escalation in tensions could disrupt energy supplies and drive oil prices higher, while signs of meaningful de-escalation may ease pressure on risk assets. Until there is greater clarity on the geopolitical front, investors are likely to remain cautious.
On the domestic front, the September-quarter earnings season is expected to drive stock-specific movements, with investors scrutinising revenue growth, margins and management guidance for signs of resilience amid rising input costs. Foreign institutional investor flows will also be closely watched for indications of whether the recent recovery has the backing of sustained overseas buying,” he said.
Asian equities are offering a more positive lead, buoyed by renewed interest in artificial intelligence-related stocks. Japan’s Nikkei 225 has advanced nearly 1.5 per cent, while South Korea’s KOSPI jumped about 4.7. “However, the strength in regional markets may translate into only limited gains for Indian equities, with elevated oil prices and geopolitical risks likely to temper risk appetite,” said Ponmudi.
Technicals
Technically also markets remain weak, said analysts.
Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, said the index on Monday’s session formed a sizable bearish candle erasing the previous session’s gains. It resembles a bearish engulfing candle, signalling profit booking at higher levels after a strong up move of almost 1,000 points in last 2 weeks.
In today’s session market is opening on a positive note amid strong global cues. On the higher side key level to watch is Monday’s high of 23,175. A move above the same will signal extension of the last two weeks pullback and open upside towards 23,500 levels in the coming sessions being the 50 per cent retracement of the entire recent decline from 24,774 to 22,180, he said adding that however, failure to reclaim Monday’s high would signal corrective consolidation in the range of 23,175 to 22,500. “Within the consolidation 22,800 is the immediate support area being recent breakout area. While 22,500-22,600 being the major support area from short term prospective,” he added.