Domestic markets are expected to open on a flattish to positive note on Wednesday, amid mixed global cues. As India macros remain robust, analysts expect the equity markets to sustain the momentum. However, amid valuation concerns, analysts expect profit-taking at select counters, especially those in which the Q1 performance has been below market expectations. Gift Nifty at 24950 indicates a small gain at open.

Morgan Stanley, global investment advisory firm, said India has systematically shifted the way it manages fiscal policy and this has already brought benefits in ensuring macro stability. Further consolidation, which we expect, would lower public debt ratios, help bring down risk-free rates, and incentivise investment.

However, the increased selling by foreign portfolio investors, especially post Budget, is a cause for concern, said analysts. On Tuesday, they offloaded over ₹5,500 crore worth shares in the equity cash segment. Shrikant Chouhan, Head Equity Research, Kotak Securities, said: the FY2025 Union Budget delivered a judicious balance between capital expenditure, fiscal prudence and welfarism, while providing minor tweaks in individual tax rates and rationalising capital gains across asset classes. FPI flows are expected to remain volatile.

Analysts expect index management to continue amid sector rotation.

According to Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One, the current price movement may seem insignificant for the benchmark, but the overall tone indicates a positive trend, with the bulls decisively leading in the advances-declines ratio.

“Additionally, the mid and small-cap stocks exhibit a strong performance, outperforming the major indices and contributing to robust market sentiment. For the Nifty50, the intermediate support is seen around 24600, followed by sacrosanct demand around the 24500 zone in the comparable period. On the higher end, 25000 is in the vicinity now, and a decisive breakthrough could lead the next leg of the rally toward the 161.8% retracement of the previous week’s swing at 25340 on an intermediate basis,” he said.

According to Krishan, “Looking forward, we maintain a positive outlook and believe any downward movement toward the support zone mentioned will favour the Bulls on D-Street. Meanwhile, increased participation from the broader markets is expected to provide momentum, and it is crucial to adopt a stock-centric approach for superior performance. We must also keep a close watch on global developments as they are anticipated to act as catalysts for the immediate trend set-up of our markets.”

Ajit Mishra – SVP, Research, Religare Broking Ltd, said: Rotational participation from the heavyweights is maintaining a positive tone amid consolidation, and we expect this prevailing trend to continue. We are targeting 25,100 in the Nifty and suggest focusing on accumulating quality stocks on dips.

Meanwhile, equities across the Asia-Pacific region are mixed, tracking the overnight US stocks performance.

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