Indian stock markets are likely to open flat to positive on Tuesday, tracking Asian peers. After a strong recovery on Monday, analysts expect markets to consolidate further. Gift Nifty at 23,690 signals a cautious mood.
Institutional activity, however, offered some support in the previous session. Both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) remained net buyers, helping stabilise sentiment after recent sharp corrections. Sustaining these institutional inflows will remain critical for bulls if markets attempt to build further upside momentum, Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.
Global cues improve as geopolitical fears ease
Supportive global cues and easing geopolitical fears are helping improve early market sentiment after recent volatility-driven sessions, he said, adding that “Asian markets opened broadly higher after crude oil prices cooled slightly following reports that U.S. President Donald Trump may postpone a potential military strike on Iran. The temporary easing in geopolitical tensions has reduced immediate fears around global oil supply disruptions, providing relief to risk assets across the region.”
Volatility likely as markets head into weekly expiry
However, despite the positive opening setup, today’s session is expected to remain highly volatile as markets head into the weekly Nifty expiry. With India VIX still elevated near 19.8, option premiums remain expensive, indicating that fear and uncertainty remain active beneath the market despite improving sentiment.
Investors watch geopolitics, crude oil and currency trends
However, Ponmudi R, CEO of Enrich Money, said investors are expected to remain highly sensitive to geopolitical headlines, with crude oil trends, rupee movement and institutional flow dynamics continuing to act as the primary drivers for Indian equities in the near term.
Derivative trading indicates a consolidation phase.
Derivatives signal consolidation with key support and resistance levels
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said from a derivatives perspective, PCR stands near 1.35, indicating strong put writing activity and improving support formation at lower levels. Option data shows aggressive Put writing near 23,500–23,300 strikes, establishing a solid support base, while call writers remain active near 23,800–24,000 levels, restricting immediate upside momentum.
“The overall setup suggests the market is entering a consolidation phase with stock-specific action dominating the broader trend. As long as the index sustains above 23,400, the buy-on-dips strategy may remain favorable for a gradual recovery towards 23,800–24,000 levels. However, a decisive breakdown below 23,300 could invalidate the ongoing base formation theory and trigger fresh weakness towards 23,100–23,000 levels,” he added.