Equity benchmarks may open on a flat note on Wednesday tracking the mixed cues from global markets. US markets ended in negative territory Tuesday while Asian markets opened flattish today.

Tuesday, NSE 50-share Nifty ended 1.76 per cent higher while June futures discount widened to 19 points. The contract price gained 1.39 per cent and added 3.08 per cent in open interest. However, widening discount, rising open interest and negative cost of carry indicates build up of shorts at higher levels.

Foreign institutional investors were net buyers of Rs 650 crore and options worth Rs 310 crore. Such funds have been covering their shorts in index futures while the total open interest is increasing, suggesting guarded optimism. The 4600 is now been a crucial levels for the Nifty in near term.

"Traders who had formed longs at lower levels would be advised to book profits and move out. Any fresh long in them from current levels may not have great risk-reward ratio. Implied volatility has decreased substantially. We suggest investors as well as traders to hedge their long positions by buying at-the-money puts. Investors should watch the PSU oil marketing companies as crude is likely to cool off," said a derivatives analyst with large brokerage.

Nifty put-call ratio decreased from 1.59 levels to 1.54 levels on heavy build up in 4600 call option. Implied volatility has notably come down from 32.44 to 28.67 levels. Total open interest in the market is Rs 87,274 crore while that in stock futures Rs 28,659 crore.

"The BSE 30-share Sensex closed above the gap (15527) and closed at the trend line on the daily chart. Trade is expected to be positive if indices manage to sustain above 15740 / 4664 levels. We may see further rally up to 15850-15970 / 4700-4730 levels. Today, 15580-15000 / 4620-4600 levels will act as supports," said a technical analyst with Angel Broking.

Stocks trading with decent positive cost of carry are Hinduja Venture, Corporation Bank, Indian Overseas Bank, Federal Bank and Nucleus.