Market on a wait and watch mode before Budget

The market ended flat after a volatile trading on Wednesday with the Sensex was up 22.77 points at 39,839.25, while Nifty closed 6.50 points higher at 11,916.80.

Indiabulls Housing, IndusInd Bank, ITC, Zee Entertainment and Grasim Industries were among major gainers on the Nifty, while losers were Eicher Motors, GAIL, Tech Mahindra, Vedanta and Dr. Reddy's Labs.

Traders were cautious ahead of the presentation of the Economic Survey on Thursday, 4 July 2019, and that of Union Budget the following day.

The broad market indices like BSE Mid-Cap and BSE Small-Cap indices gained more, thereby outperforming the Sensex/Nifty.

Technical View
"The Nifty closed flat in the last trading session and it remains to trade within a small range. However, the Index has again closed above 11,900 levels for the second consecutive day; hence the probability of an upside is quite high. The Index seems to have formed a rising wedge pattern on the hourly charts, so till those levels aren't taken off i.e. 12,000 levels the overall market seems to be in a range of 11,800-12,000 levels," said Jay Thakkar, CMT Head Technical and Derivatives Research - AVP Equity Research, Anand Rathi Shares and Stock Brokers.

"Since last three consecutive sessions, the Nifty has been closing on a positive note. We have seen some fresh long additions during this period in Index futures segment; however, the quantum remains insignificant. The rollovers in the Nifty indicated longs formed in June series are still intact in the system. Meanwhile, we have been consistently observing good amount of writing in Index puts since last couple of sessions. On Wednesday, 11,900 and 11,950 put strikes added massive positions and we believe these are again shorts," said Sneha Seth Derivatives Analyst, Angel Broking.

On Wednesday, India VIX was down almost four per cent, which analysts believe low implied volatility is indeed a positive indication for near term.

Market View
"Going forward, we maintain our cautious stance on the Indian markets. The near-term movement is likely to be driven by the upcoming Union Budget (scheduled on July 05). Globally, while the temporary trade truce between US and China is a positive development, the recently escalated tensions between US and Iran could continue to induce high volatility across indices. Meanwhile, market participants would also monitor the monsoon progress, movement of crude oil prices and currency," said Jayant Manglik, President - Retail Distribution, Religare Broking Ltd.

"Market will be volatile ahead the big event and profit booking is natural at this high level. However, underlying trend of the markets seem positive in expectation of revival in growth led by actions to boost infrastructure, investments, housing and bring a relief to rural distress. A spur in safe haven asset indicates investors' fear in the global market, FIIs are on risk off mode," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.