The benchmark indices traded flat in early deals on December 26 amid mixed global cues. At 9:34am, the Sensex was down 9 points or 0.01 percent to 71,098, and the Nifty was up 16.5 points or 0.08 percent to 21,366. About 2,032 shares advanced, 959 declined, and 118 remained unchanged.
Except for Information Technology, all sectoral indices traded in the green. UPL, Tata Steel, Tata Consumer Products, NTPC and Britannia Industries were among the top Nifty gainers, while Infosys, Wipro, Tech Mahindra, TCS and HCL Technologies were the laggards.
"The global rally in December led by the mother market US has lifted most markets significantly and India was fortunate to have the lift from the state election results too. The 6 percent rally in the Nifty in December has heated up the market a bit and the bulls are likely to wait for the new year for further action," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
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"High valuations continue to be a short-term concern. However, the global market construct continues to be favourable with the US inflation, bond yields and the dollar index trending down. 'Buy on dips' continues to be the best strategy in the present market context. Safety is in large-caps. The automobile sector is well placed for a cyclical upswing," he added.
The Nifty is consolidating recent gains, and a positive trend is expected with the prevailing strategy of buying on dips, according to Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. "The bullish sentiment on Dalal Street revolves around the Santa Claus Rally, anticipating strength in the final five days of the year and the first two days of the new year. We foresee year-end window dressing supporting stocks this week, and historical trends suggest optimism for a Happy New Year among Nifty perma-bulls."
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According to Tapse, technically, Nifty's upside target is at 21,593, with a cautious note if it slips below 20,976. Options data suggests Nifty may trade within 21,000-22,000, with 22,000 as a crucial resistance zone, he said.
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