Mumbai, Oct 14: Domestic equity benchmarks opened on a muted note on Wednesday with investors weighing supportive domestic cues against persistent global headwinds.
Nifty began the session at 22,715.75, down 6.20 points or 0.03 per cent. Similarly, Sensex opened at 73,049.76, up 15.98 points or 0.02 per cent.
However, sectoral performance remained mixed with technology stocks leading gains.
Nifty IT emerged as the top gainer, rising more than 1 per cent, followed by Nifty MidSmall IT & Telecom and Nifty FMCG which surged up to 0.38 per cent.
Nifty Media and Nifty Private Bank were also in positive territory.
Meanwhile, Nifty Consumer Durables fell 0.67 per cent. Healthcare-related indices remained under pressure with shedding up to 0.6 per cent.
According to market experts, Tuesday's sharp rally in the Nifty came as a surprise in an otherwise weak and downtrending market, largely driven by short-covering activity.
The trigger for the upswing was Finance Minister Nirmala Sitharaman's remarks that the government would carefully review stakeholder feedback on the long-term capital gains (LTCG) tax and securities transaction tax (STT), they added.
The comments raised hopes of potential policy changes, boosting investor sentiment.
Analysts also highlighted the RBI's recent measures to curb currency market speculation which helped the rupee appreciate nearly 1.5 per cent over the past two trading sessions.
However, caution persists as the US 10-year Treasury yield remains around 5.2 per cent and Brent crude trades near $106 per barrel, both of which are viewed as significant headwinds for equities.
While these factors could limit the sustainability of the rally, analysts believe sectors such as financials, telecom, metals and automobiles could remain relatively resilient on expectations of healthy second-quarter earnings.
Technically, analysts note that the recent surge has revived hopes of a move towards the 23,200 level.
They further noted that the index is approaching a congestion zone that could challenge further upside momentum. Immediate support is seen around 22,550, while a decisive move above the 22,787-22,880 hurdle could strengthen bullish momentum.
Additionally, Asian equities rebounded after two consecutive sessions of losses, supported by expectations that the US Federal Reserve may adopt a less aggressive approach to interest rate hikes next year.
Crude oil prices advanced as traders assessed supply risks stemming from clashes involving Yemen's Iran-aligned Houthis and Saudi Arabia, while also monitoring the prospect of increased Russian diesel supplies to global markets.
--IANS