Markets are expected open on a subdued note following weak cues from Asia. The Nifty futures on the Singapore Exchange were unchanged at 5,632.
Analysts said that 7% rally posted last week will fade away in the coming days. Elara Capital in the monthly note said, "There are too many headwinds such as inflation numbers and tightening that could snatch the legs away from the rally." On the technical charts Nifty has strong support around 5,600 level.
The rally from 5,250 to 5,600 was mainly led by Foreign Institutional Investor fund flows as they have invested Rs 8,947 crore (around $2 billion) in the past seven trading sessions.
The Nifty will consolidate in a band of 5,620-5,680 levels. Emkay Global Research in the morning note said, "Derivative data indicates skepticism in the prevailing market as there was lower accumulation of positions in the Nifty futures segment. Nifty July futures had open interest of 21.57 million contracts on Tuesday, which was lowest in past three series (compared on three days after expiry)."
Markets across Asia were trading lower on Wednesday morning session. Hong Kong's Hang Seng and China's Shanghai Composite lost 0.5% and 0.9%, dragged down by losses in the banking shares. Japan's Nikkei Stock Average was up 0.2%, supported by mild gains in blue-chip technology shares.
Back in India, among individual stocks Godrej Consumers will be on the radar this morning on reports that Hershey's, a US based chocolate major and Godrej have called off their joint venture due to management differences.
Also Reliance Industries will be on the buzzer this morning after the oil & gas conglomerate has agreed to drill three development wells at Krishna Godavari basin. RIL has been under attack by Directorate General of Hydrocarbons for not meeting its drilling requirements.