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Markets continued to trade flat with positive bias helped by a rebound in index heavyweights and financials shares which had witnessed sharp declines in the previous sessions.
At 9:35AM, the 30-share Sensex was up 46 points at 28,756 and the 50-share Nifty was up 13 points at 8,725. BSE Realty index was the top gainer along with Bankex, IT, Oil and Gas among others.
Technical chartists say if the Nifty doesn’t cross and hold above 8820 level, weakness may continue towards next major support of 8,669 then 8,626.
"On the upside, if it sustains above 8,820 then only it can bounce back towards 8,880-8,900 levels," points out a morning note from Anand Rathi Research
Further, foreign institutional investors turned net sellers in equities worth Rs 748 crore on Tuesday, as per provisional stock exchange data. They were also net sellers in the F&O segment to the tune of Rs 475 crore.
Analysts at Angel Broking suggest that the Nifty should ideally bounce from the strong support zone of 8,665-8,644. However, breaching of the same can drag the index to the next support of 8,500 mark.
"On the flipside, unless we see an immediate reversal from 8,665 levels and a close above 8,740; the downside will not have been stemmed. Thus, we continue to advice traders to stay cautious and avoid trading aggressively on long side. The immediate resistance for Nifty is placed at 8,740 and 8,780," they said in note.
GLOBAL MARKETS
Meanwhile, major US share indices ended sharply lower on Tuesday on rising prospects that the US Federal Reserve may raise interest rates sooner-than-expected post the robust jobs data and the strengthening US dollar.
The S&P 500 registered its highest decline in two-months. The Dow Jones industrial average dropped 333 points or 1.9% to end at 17,662.94, the broader S&P 500 slipped 35 points or 1.7% to close at 2,044.16 and the tech-laden Nasdaq ended down 83 points or 1.7% to finish the session at 4,859.80. US crude oil prices also firmed up tracking gains in the US dollar.
Asian stock markets were also jittery tracking sharp overnight losses in US stocks while the dollar further appreciated against the euro lifting the greenback to a 12-year high. Meanwhile, core machinery orders in Japan declined 1.7% in January from the previous month.
STOCKS & SECTORS
Index heavyweights Infosys and Reliance Industries were among the top contributors to the Sensex gains.
HDFC Bank and HDFC which had witnessed selling pressure in the previous session were marginally up 0.4-0.7% on the back of shortcovering at lower levels.
Among other financials, ICICI Bank, SBI and Axis Bank were the other top Sensex gainers.
In the telecom space, Bharti Airtel was marginally down on profit taking after sharp gains of over 7% on Tuesday. However, Idea Cellular and Reliance Communications were up 0.8-1.8% each.
Among other shares, Shares of basmati rice exporters have rallied by up to 8% in early morning trade on BSE on media reports that India may resume exports of basmati rice exports to Iran early next year. KRBL, LT Foods and Kohinoor Foods have surged between 4-8% on the Bombay Stock Exchange (BSE).
In the broader market, the BSE Mid-cap and Small-cap indices were up 0.4% each.
Market breadth was strong with 993 gainers and 610 losers on the BSE.
