Sensex, Nifty flat amid subdued global cues, investors in wait-and-watch' mode ahead of Q3 earnings

Some retracement is expected to make markets healthy, say analysts

The 30-pack Sensex and the broad Nifty were flat in the opening trade on January 10, with the domestic markets following subdued global cues. As investors wait for fresh triggers for the next leg of up move, market experts say the pause that follows the recent record run will make the overall breadth healthy.

At 9.50 am, the Sensex and Nifty 50 were trading flat at 71,405 and 21,548, respectively.

"Some retracement will be healthy for overall markets after a steep upmove seen in the past month. We eye 21,500 as a key support level for Nifty," told Milan Vaishav, Founder, Gemstone Equity Research to Moneycontrol.

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Globally, investors remain in ‘wait and watch’ mode as fresh triggers like earnings season and inflation figures will feed data to the US Federal Reserve’s rate action approach. Investors have increasingly raised their bets on possible rate cuts as early as March 2024, though some temperament was observed in last few days after strong jobs report.

At this time of heightened volatility, Sameet Chavan, Technical Analyst at Angel One suggested investors to exercise caution and stay abreast of global developments as it would act as a catalyst to dictate the trend.

The ongoing time-wise correction is prominent as the index has been consolidating in the range of 300-350 odd points for almost ten sessions now and both the counterparties are showing their resilience on their respective side of the range, he said.

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“For now, 21,650-21,700 is likely to act as immediate resistance, followed by the sturdy hurdle of 21,750-21,800 in the comparable period,” Chavan noted.

Technically, analysts at S&P Global explained that since Nifty had completed ‘head and shoulder chart pattern’ at daily time frame – considered as one of the most bearish patterns, this is therefore resulting in ‘profit-booking’ by many short-term investors.

The overall muted trend galloped broader markets as well. Nifty Midcap 100 and Nifty Smallcap 100 indices slipped up to 0.4 percent on January 10 morning deals. Fear gauge, India VIX, thereby, saw an uptick of 1 percent.

Sector-wise, investors booked profits in realty and oil and gas stocks after seeing decent run up in the last few days. Both these indices dropped over 1 percent each. Capping the downside were media, technology, and consumer durable names.

Starting tomorrow, Q3 results will be keenly eyed by investors. “A trend might emerge in the coming days in response to Q3 results,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services. Hence, investors were suggested to hold on to their seatbelts before another bull or bearish ride, recommended market watchers in consensus.

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