Amid neutral global cues, the Indian market opened on a flat note ahead of the three-day Reserve Bank of India's monetary policy committee (MPC) meeting, which starts today (Wednesday). The benchmarks Nifty 50 and Sensex started the fresh session at 17,349.25 and 58,174.11  respectively. 

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"The first leg of the downsides anticipated yesterday into the 17240-110 region, unfolded in the first half, only to find strong bargain buying catapulting Nifty above yesterday’s high. This relentless buying interest is classic of bull phases, but the rise in VIX in the last two days hints at an increase in vulnerability, especially as we move closer to 17500," said Anand James - Chief Market Strategist at Geojit Financial Services 

However, negative divergences in oscillators spotted in short periodicities are yet to appear in the longer time frame, suggesting that Nifty needs more time in the 17500 vicinity before a turn lower unfolds, said James, adding that for now 17220 may be kept as the downside marker. 

In the broader market, Nifty Midcap opened flat with negative bias, while the Smallcap index gained almost half per cent in the opening trade.  

Among sectoral indices, auto and consumer durables attracted some profit booking , while others traded flat or with marginal gains.  

Speaking on the current market trend, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said FIIs turning buyers, short covering by the bears and active retail participation have led to 14 % recovery in Nifty from the June lows.  

This has pushed the market to overbought territory, but continuation of FII buying may impart resilience to the market, he said.  

However, the expert advised investors to be cautious.  

"Investors should exercise caution since global growth slowdown is serious and this has the potential to impact exports from emerging markets like India. This is already visible in the July trade data. Additionally, the new tensions arising from Nancy Pelosis's visit to Taiwan and China's sharp reaction to that has emerged as an irritant. So, investors have to be cautious," the expert said. 

On trading ideas, Vijaykumar said after the deserved run up in financials, segments like automobiles, particularly the PV and CV space, capital goods and segments in FMCG are now attracting informed buying due to their improving prospects. 

In the pre-open session, the Sensex was seen trading with a marginal gain as 16 stocks advanced and 14 declined on the 30-share index. Nifty Metal and Oil & Gas were the top gainers among sectoral indices.  

Earlier, SGX Nifty traded higher by over 50 points on the Singaporean Exchange, Japanese Nikkei 225 rose 0.6%, while Hang Seng Index at the Hong Kong Exchange and Chinese Shanghai Composite gained nearly 0.2% and 0.3% respectively in early trade on Wednesday.  

On Tuesday, the US market closed lower amid escalating tension with China. Dow Jones fell over 400 points, Nasdaq dropped 22 points and S&P 500 ended lower by 27 points on Tuesday.