Domestic markets are likely to open on a weak note on Tuesday. According to analysts, sentiment is likely to remain bearish, and a risk-off trade will keep small- and mid-cap stocks (SMID) vulnerable. However, value buying in certain pockets is not ruled out during the later part of the day, they said.
GIFT Nifty is trading at 25,960 against the previous close of Nifty futures at 26,060, indicating a gap-down opening of around 100 points for the Nifty.
Ponmudi R, CEO of Enrich Money, said Indian equity markets are entering Tuesday’s session in a cautious consolidation phase following a controlled corrective pullback from recent highs. Global cues remain mixed ahead of the crucial US Federal Reserve policy decision, keeping most Asian markets flat to mildly negative, he added.
“Overnight, Wall Street ended mixed, with pressure evident on the Dow and S&P 500, while volatility spiked as the VIX jumped over 8 per cent. The rise in US Treasury yields ahead of the Federal Reserve’s widely anticipated quarter-point rate cut has added a fresh layer of caution among global investors, exerting additional pressure on equities. Typically, yields ease when markets expect rate cuts, making the current move higher a source of unease for risk assets,” he cautioned.
GIFT Nifty futures are signalling a subdued and mildly bearish start, reflecting the prevailing risk-off undertone.
“From a macro and fundamental standpoint, the broader market backdrop remains supportive. The RBI’s recent 25 bps repo rate cut to 5.25 per cent, softening CPI trends toward the lower band, and FY26 GDP growth estimates near 7.3 per cent provide a constructive foundation for corporate earnings and reinforce India’s long-term equity narrative. However, in the near term, investor sentiment remains restrained amid global uncertainty around the Fed’s rate path, a firm US dollar, rupee pressures near the 90 mark and persistent geopolitical risks—all of which are keeping risk appetite in check. While near-term sentiment remains guarded, the medium-term market structure continues to stay constructive,” Ponmudi added.
According to Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research), Centrum Broking Ltd: “The Nifty halted its two-day winning streak with a strong bearish candle on the daily chart. It slipped below the short-term 21-DMA around 26,000, which now becomes the immediate resistance zone. A sell signal on the MACD and a bearish divergence on the RSI further reinforce the cautious tone. Overall, the setup points to a consolidation phase, with the index likely to oscillate within the broader 25,800–26,200 range in the near term. The drop was also accompanied by a sharp 7 per cent rise in INDIA VIX to 11, signalling heightened uncertainty.”