Amid global headwinds, domestic markets are likely to open on a weak note on Thursday. Despite better GDP estimates, analysts expect the market to remain volatile and downbeat, with the mood cautious and foreign portfolio investors continuing to sell. The focus will shift to India Inc’s Q3 performance which will start trickling in from next week.
Ponmudi R, CEO of Enrich Money, said: With both the and Bank Nifty holding key support levels but encountering stiff overhead resistance, market sentiment remains cautious amid elevated geopolitical tensions, renewed tariff-related concerns, and continued foreign portfolio outflows. Against this backdrop, the broader market is likely to open flat to range-bound, tracking mixed cues from global markets. Near-term direction will hinge on early follow-through above key resistance levels. “Until a decisive break-out emerges, trading activity is expected to remain selective, with participants favouring stock-specific opportunities over broad-based positioning, especially as December-quarter earnings from index heavyweights begin to trickle in from next week,” he said.
Gift Nifty at 26,190 indicates a gap-down opening of about 50 points for Nifty.
According to Emkay Global Financial, 2026 should be India’s comeback year, aided by a cyclical consumption recovery. “We expect FY27 Nifty EPS to bounce back to 14%, accompanied by a broad-based earnings recovery. This should help turn the tide on flows, and we expect positive outcomes on domestic and overseas flows – after a rough 1QCY26. Our three key themes are Autos, Internet/new age businesses, and SMID lenders,” he added.
Meanwhile, the Statistics Ministry on Wednesday estimated the real growth for 2025-26 at 7.4 per cent compared to 6.5 per cent in the last fiscal year, thanks to strong performances by the services sector and manufacturing Although the nominal growth is seen at 8 per cent, lower than the Budget Estimate, economists believe it will not impact the fiscal deficit for the current fiscal.
Rajani Sinha, Chief Economist, CareEdge Ratings based on the Advance GDP Estimates, said:The advance estimate of GDP growth of 7.4% for FY26 is very much in line with our expectations. With favourable factors like GST rationalisation, lower income tax burden, low inflation, cut in interest rates and strong rural demand, the growth momentum was expected to be healthy. “However, we need to be wary of the heightened global uncertainties and trade barriers imposed by the and the impact of that on our exports and capital flows.”
Even with nominal GDP growth estimated at a low of 8% in FY26, she expects the government will manage to broadly meet the fiscal deficit to GDP target of 4.4 per cent. “While tax revenue growth has been weak, there is support from higher dividend transfer by RBI to the government. Moreover, in the fiscal year so far, the government has gone slow on revenue expenditure, even while strongly pushing capital expenditure.”
With GDP growth remaining healthy, we feel that the is unlikely to cut rates further in the next meeting. Given the turbulent global landscape, we expect the MPC to pause and preserve the policy space for a future rate cut only if the growth outlook deteriorates, she added.
The derivatives landscape mirrors the prevailing sideways bias. According to Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, call writers have added fresh positions at the money and nearby strikes, effectively capping near-term upside. On the other hand, put writers continue to hold substantial positions at and below lower strikes, suggesting expectations of consolidation rather than a sharp directional move. The Put-Call Ratio (PCR) has slipped to 0.73, indicating heightened caution and increased seller presence at higher levels.
Equities in the Asia-Pacific region present a mixed outlook with Japan, China and Hong Kong markets ruling weak even as Korea’s Kospi surged.