Benchmark indices Sensex and Nifty are expected to open flat on Wednesday amid mixed global cues. However, according to analysts, broader markets - Midcap and Smallcap - will continue to outperform despite stretched valuations.

Gift Nifty at 19665 against Nifty September futures closing of 19,653 signals a flat opening despite the US stocks closing in the red overnight. Asia-Pacific markets are mixed, with Japan and Singapore markets scoring gains even as Australian and others fell.

However, the Nifty Midcap crossed the 40,000 mark for the first time in history while the Nifty SmallCap hit a new peak.

Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services Ltd, said:  Going ahead, the market would continue trading in a broader range with positive bias as a resilient domestic economy provides strength amidst uncertain global cues.

On the economic front, macro numbers remain robust, said analysts.

According to Deepak Jasani, Head of Retail Research, HDFC Securities, India’s services sector activity eased in August, but growth rates for new orders remain elevated, as services firms indicated the sharpest upturn in new export business, which acted as a catalyst for firms to expand their workforces as well as output, a monthly survey said on Tuesday. Despite falling from 62.3 in July to 60.1 in August, the seasonally adjusted S&P Global India Services PMI Business Activity Index indicated one of the strongest increases in output seen since mid-2010. For the 25th straight month, the headline figure was above the neutral 50 threshold. The S&P Global India Composite PMI Output Index -- which measures combined services and manufacturing output -- fell from 61.9 in July to 60.9 in August.

According to Chola Securities, FIIs are still selling in the cash segment. The FII’s have covered their short positions on the index futures front. The total number of long positions from the FII stands at 7,381. The long/short ratio is at 52%, indicating more long contracts.

On September 5, 82 long contracts were added compared to the liquidation of 1,696 short contracts in index futures. The net call-put indicates more call writers on the index options front. “To conclude, sentiments are bullish on the index. The index has closed above 19,500 decisively with good market breadth,” it added.