(RTTNews) - The Indian market may see further consolidation around current levels in Wednesday’s trading, as positive sentiment generated by the positive close on Wall Street may be tempered by caution due to the recent run-up witnessed in the domestic market. Additionally, some traders may look to take profit on their gains ahead of the public holiday on Thursday, the upcoming third quarter reporting season and the release of the U.S. non-farm employment report on Friday.

On Tuesday, the BSE Sensex opened lower and remained mostly below the unchanged line in morning trading. The emergence of buying interest pushed the average above the flat line for about an hour in the afternoon. However, profit taking dragged the Sensex deeper into the red, with the index plunging to an intra-day low of 10,151. In the last hour of trading, the Sensex staged a stellar turnaround and moved back into positive territory to close up 60.33 points or 0.59% at 10,336, ending higher for the fourth straight session.

Notwithstanding the buoyancy in the blue chip space, the small cap and mid-cap stocks came under selling pressure, as reflected by the 0.19% and 0.23% declines, respectively by the BSEMidCap and BSESmallCap Indexes. Among sector indexes, metal and bank stocks rose strongly for the second straight day, while auto stocks also showed strength. On the other hand, technology, consumer durable and realty stocks showed significant strength.

Although U.S. stocks showed some degree of volatility in Tuesday’s trading, especially in the morning in reaction to mixed economic readings, they remained mostly above the unchanged line. The positive momentum that has characterized trading since late 2008 seemed to linger on, as traders bought into beaten down stocks on hopes of seeing a turnaround in economic conditions in the near future.

The Dow Industrials was up 62.21 points or 0.69% at the end of the session, while the Nasdaq Composite Index gained 24.35 points or 1.50% to 1,652 and the S&P 500 Index rose 7.25 points or 0.78% to 935.

Indian ADRs were mostly higher on Wednesday, with Rediff and Sify leading the gains, with advances of 9.05% and 8.54%, respectively. However, Patni and Mahanagar Telephone Nigam bucked the uptrend.

On Wednesday, the Asian markets are mostly higher, led by the Japanese and South Korean markets. However, the Chinese and the New Zealand markets are showing modest weakness. The dollar’ strength and the tech rally in the U.S. markets are benefiting domestic exporters and technology shares.

Crude oil futures are rising $0.10 to $48.68 a barrel in Asian trading after receding $0.23 to $48.58 a barrel in the New York session on Tuesday. Gold futures, which rose $8.20 to $866 an ounce on Tuesday, are currently trading down $6.80 at $859.20 an ounce.

The tech space should reveal some buoyancy amid caution, tracking the positive performance of their peers in the U.S. Among individual stocks, Indian Oil Corporation and ONGC may react to their announcements that Oil Sector Officers’ Association, including officers from both companies, has proposed to go on a strike, effective January 7th.

Birla Corp. may also be in focus after it said it has declared a lay-off, effective January 5th at its Birlapur Auto Trim Division due to power shortage. BSEL Infrastructure is expected to move in reaction to the news that it has exited from BW Highway Star Hotel Project at Balewadi Pune by selling its stake amounting to 17% in the project.

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Posted in Categories: Japan, New Zealand, Releases, Stocks, USA.

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