Domestic markets are expected to open flattish to weak on Wednesday amid a lack of major triggers. Analysts expect sector rotation by traders to keep the market in a narrow range, with major activity continuing to centre around outside of benchmark indices. Gift Nifty at 24,680 signals a flat opening for Nifty.

Meanwhile, S&P Global Ratings has predicted that the Indian economy is set for “resilient growth” in 2025 and projected inflation pressure to recede, which will lead to the RBI’s “modest” easing of monetary policy.

Analysts say the focus has shifted to macroeconomic data such as inflation. However, buying by foreign portfolio investors will help the market stay afloat, they added

Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said:  Market sentiment will be influenced by U.S. inflation data to be released tomorrow. 

“On the domestic front, the primary markets will have three mainline IPOs, including Vishal Mega Mart and Mobikwik, opening for subscription. FIIs have bought equities worth Rs12,658 crore in December month so far with only 2 days of selling, thus providing much needed boost to the broader market. We expect the market to largely remain in a broader range with a positive bias supported by FII buying and favourable government policies,” he added.

Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher, said: With investors turning cautious ahead of key macroeconomic data, market participants are closely watching potential shifts in sentiment, as inflation reports from both domestic and international sources are expected to influence market trends in the coming days.

Emkay Global Research analysts said: “We expect a strong recovery in central government capex in 2HFY25. Our meetings in Delhi earlier this month, on-ground feedback, and movement in government balances seem to indicate the same. Defence and Roadways are expected beneficiaries, and our best way to play these are L&T, HG Infra, Hitachi Energy, Ashok Leyland, and Voltamp. “On our recent trip to Delhi, the consensus view was that the capex slowdown in 1HFY25 has been largely led by the elections and the monsoons. A robust recovery is expected in 2HFY25, with many projects now being bid out and execution likely to accelerate. The FY25 target of ₹11.11 trillion may be missed, but a strong sequential growth is expected after a sluggish 1HFY25, when capex was only ₹4.15 trillion,” they said.