Indian markets are set to debut with a sharp gap-up opening on Wednesday morning mid positive global cues. The benchmark indices recouped the majority of the losses on Monday as buying emerged from the lower levels. The global market cues remain positive on Wednesday as reports suggest that a second round of negotiation talks between the US and Iran will take place soon in the coming days. The de-escalation measures were welcomed by investors across the globe as all the major global indices closed in green on Tuesday. The US markets closed in green for the second consecutive session on Tuesday.
Key Factors to Watch This Wednesday
Markets are expected to remain sensitive to global cues and institutional activity this Wednesday, with a few critical factors likely to drive momentum.
FII Activity: Foreign Institutional Investors (FIIs) have turned cautious, selling equities worth ₹1,983 crore on Monday after a brief buying streak of ₹672 crore on Friday. With global sentiment showing signs of improvement and domestic markets still recovering from recent corrections, investors will closely watch whether FIIs resume consistent buying. Notably, FIIs currently hold nearly 78% of their positions on the short side, which signals that any positive trigger could spark a sharp short-covering rally in the near term.
Crude Oil Movement: Crude oil prices have been highly volatile in recent sessions, reflecting global uncertainty. However, Brent crude has slipped below the $100 per barrel mark, easing concerns around inflation and input costs. The cooling off in oil prices, driven by de-escalation signals globally, could provide some relief to equity markets, especially for sectors sensitive to fuel costs.
NIFTY50
The NIFTY50 index ended the previous session nearly 200 points lower, though it managed to recover a significant portion of its intraday losses, indicating buying interest at lower levels. As highlighted earlier, the 20-day EMA around 23,500 continues to act as a key support zone, which remains crucial for sustaining the current trend.
On the upside, resistance is still placed near the 24,200 level, as the index has failed to close above this mark consistently in recent sessions, making it an important breakout zone to watch.
Despite short-term volatility, the overall momentum remains bullish, supported by a steady uptrend visible on the hourly charts. If the index holds above support levels, a gradual upward move towards resistance levels can be expected, while a breakdown below 23,500 may trigger short-term weakness.
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In the Futures & Options (F&O) segment, understanding Open Interest (OI) movements is crucial for market analysis:
- Long Build-up: Increase in OI along with a rise in price, indicating bullish sentiment
- Short Build-up: Increase in OI along with a fall in price, indicating bearish sentiment
Source: Upstox, National Stock Exchange of India
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