Seeking direction. Market to open on a flat note

The stocks markets are expected to open on a flat note on Wednesday, despite positive global cues. The SGX Nifty is ruling at 18,453 against the Nifty futures closing price of 18,462.05. US stocks, though volatile, ended on a strong note. However, equities across Asia-Pacific are down marginally, struggling to find direction.

From a trading perspective, another lacklustre day is on the cards in the domestic markets, say analysts.

Though the BSE Sensex and Nifty Bank have hit a new peak, the market clearly lacks triggers to move forward, they added.

With domestic inflation showing signs of cooling, traders are hoping that the RBI may take a dovish stance in its policy meeting next month, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. “For trend-following traders, 18,300 would be the sacrosanct support level. Above that level, a rally till 18,500-18,600 is possible. On the flip side, a decline below 18,300, could see the index hitting 18,230-18,200,” he added.

“Though the benchmark Indices have been hitting new highs for the last couple of days, suggesting good participation by bulls; we would still recommend being stock specific and continuing to book profits at regular intervals until these crucial levels are sustained,” said Choice International.

According to the BofA November Global Fund Manager survey, 92 per cent predict “stagflation” in 2023 vs 0% for (bullish) “goldilocks,” and just 1 per cent see (bearish) “debt deflation” as tail risk next year.

“We say the probability of the latter is high on credit events/ unemployment, but if inflation rates tumble lower in the coming months, bulls can wrestle back some control from the bears,” it added.

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