Traders are likely to witness a volatile session today due to the imminent expiry of the November series derivative contracts even as the latest development in the US-China trade talks may keep the overall sentiment positive.
Market players will adjust their positions ahead of the weekly and monthly expiry of Futures and Options contracts tomorrow.
The rebalancing of MSCI indices will be effective starting today. Berger Paints India, Colgate-Palmolive, DLF, HDFC Asset Management Company, ICICI Prudential Life Insurance, Info Edge, SBI Life Insurance and Siemens India will be added to MSCI India Index. Conversely, four stocks -- Glenmark Pharma, Indiabulls Housing Finance, Vodafone Idea and Yes Bank will be axed from the index.
That apart, developments in Maharashtra with respect to the formation of the government could weigh on investor sentiment.
On the US-China trade talks front, US President Donald Trump said the United States and China were close to an agreement on the first phase of a deal while stressing Washington’s support for protesters in Hong Kong, a point of contention between the world’s two largest economies.
Consequently, US stocks crawled higher on Tuesday and all three major Wall Street indexes notched record levels. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite added about 0.2 per cent. Asian shares ticked higher in Wednesday's early trade. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.14 per cent. Australian shares added 0.46 per cent and Japan's Nikkei rose 0.41 per cent. The SGX Nifty, though, was trading with slight cut, indicating a flat to negative start for the domestic indices.
Oil prices rose on Tuesday after news that U.S. and Chinese officials discussed trade. Brent crude futures gained 62 cents to settle at $64.27 a barrel.
Back home, benchmark indices ended yesterday's session with minor cuts after touching record high during the day. The S&P BSE Sensex ended at 40,821 levels, down 68 points and NSE's Nifty50 index settled at 12,038, down 36 points.
According to analysts, the bullish technical setup of Nifty is well-maintained and the index is heading towards the upside target of 12,300. Longs should be protected with the stoploss of 11900.
Here's a trading idea by HDFC Securities who recommend buying Canara Bank at Rs 222.7 for the target of Rs 250 with stop-loss at Rs 214.