Domestic markets are expected to open on a negative tone on Wednesday amid weak global cues. Gift Nifty at 21,681 indicates a gap down opening of about 80 points as NIfty futures on Tuesday closed at 21,756.75 at the NSE.

Analysts said bulls need fresh triggers for both global as well as domestic markets as all the positives are already discounted.

The indices witnessed some pullback in Tuesday’s sessions as the IT and the banking heavyweights witnessed some selling pressure, said Ruchit Jain, Lead Research, 5paisa.com. However, the overall market was not very negative and certain sectors such as Pharma and Oil & Gas continued their upmove, he said.

“The overall data from the FIIs remain positive with minor unwinding seen, while in the options segment the put writers in the index had to cover their positions,” he added.

Asian stocks are down in early deals on Wednesday.

Mandar Bhojane, Equity Research Analyst, Choice Broking, said: “Analysing Open Interest (OI) data, the highest OI on the call side is noted at the 21,800 level, followed by the 22,000 strike prices. On the put side, the highest OI is observed at the 21,500 strike price. This data provides insights into the levels where options traders have the greatest exposure.”

Profit taking in banking, IT, auto and realty stocks took a toll on the markets, as expensive valuations prompted investors to pare their holdings, said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

“Besides, the ongoing conflict in the Red Sea has been making investors jittery as any flare-up in violence could trigger an upsurge in oil prices and weigh on the economy. The biggest negative catalyst: COVID-19 sub-variant JN.1 cases have seen a surge throughout India. Strictly speaking, if the last two days’ trading action on Dalal Street is any indication, then volatility could be seen going ahead,” he cautioned.

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