Nifty to open with minor gains as excitement over vaccine fizzles globally

SGX Nifty is trading with minor gains of about 33 odd points or 0.28 per cent on Wednesday. The global markets, especially the European markets, closed higher with gains of more than 1 per cent each on Tuesday on the back of optimism over the vaccine development. 

The market rotation in the US markets ensured that there is an unwinding of trade in the tech stocks even as cyclical stocks were showing some strength. Globally, the sectors that showed promise of gains due to unlocking of the economy showed relative strength, and the same was seen in India as well. 

Dow sizzled by 262 points or 0.90 per cent while S&P 500 was flat with a negative bias slipping by 4.97 points or 0.14 per cent. The slid in tech stocks continued as reflected in Nasdaq's down move by more than 1 per cent on Tuesday. 

Asian markets are mostly trading in green with tech stocks keeping pressure on the Chinese benchmark indices.

Nikkei is up by more than 1 per cent while Shanghai and Hang Seng are mostly flat with some minor gains. 

With most of the stocks advancing on Wednesday and tech stocks taking a beating, the same story could be repeated in the Indian markets as well with cyclical stocks showing strength and tech stocks witnessing some pressure. 

In short, Nifty seems to be in an overbought zone, and hence, some profit-taking at the higher levels is not ruled out. To put things in perspective, Wednesday could turn out to be a volatile session with tech stocks reeling under selling pressure.