Domestic markets are expected to open flat on Wednesday, with analysts anticipating buying at low levels, particularly in quality stocks in the mid and small-cap segments. While global sentiment will influence market sentiment, analysts believe that the downside potential is limited given the significant decline seen since the market peak.
According to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, weak global cues and a lack of domestic triggers are likely to keep Indian equities subdued. However, continued buying interest in the broader market could provide some support.
The Nifty futures on the NSE closed at 22,191, indicating a flat to negative opening for the Nifty at 22,130.
Technical Analyst Rajesh Bhosale from Angel One Ltd suggested that the ongoing decline is creating opportunities to accumulate quality stocks for short to medium-term investments. He identified immediate resistance levels at 22,250, followed by a bearish gap near the 22,450 zone. Bhosale advised traders to focus on stock-specific opportunities rather than aggressive positions on the index.
In the derivatives segment, a bearish outlook is prevailing. Dhupesh Dhameja, Derivatives Analyst at Samco Securities, noted that call writers are dominating over put sellers, reflecting a cautious market sentiment. Significant open interest at the 22,500-call strike established a strong resistance level, while put accumulation at the 21,500 strike reinforced a sturdy support base.
The range of 22,200–22,500 is under intense call writing pressure, with a shift in put writing to lower strikes indicating a bearish sentiment. The Put-Call Ratio (PCR) rising from 0.71 to 0.79 highlights negative sentiment in the market, with the Max Pain level at 22,300 suggesting that bulls might try to absorb declines in the near term.
In the Asia-Pacific region, stocks are mixed in early trading, with Chinese and Korean stocks edging up while Japanese and Australian stocks are down. US stocks fell overnight amid discussions on tariffs among various countries.
