Indian equity markets are likely to open on a flattish to negative note on Monday. Gift Nifty at 25,580 signals marginal weakness at open, as Nifty futures closed at 25,589 on Friday.
Analysts expect the market to remain volatile, tracking global cues. Reports from the US Senate indicate a deal to fund the government through January 30, signalling that the shutdown is poised to end. Global cues and foreign fund flows will dictate the direction.
Macro cues ahead
Ajit Mishra – SVP, Research, Religare Broking Ltd, said: The upcoming week will be crucial, with several key macroeconomic data releases scheduled.
“On the domestic front, focus will be on India’s CPI inflation and WPI inflation data, which will provide insights into the inflation trajectory and policy outlook,” said. Globally, traders will monitor the performance of AI-related stocks and developments around global trade deals, both of which are expected to influence market sentiment, he added.
FII outflows weigh
While October witnessed net FII buying of Rs 3902 crore, November has started with FIIs turning sellers on every trading day, so far. The net FII sell figure through exchanges in November, up to the 8th, stood at Rs 13367 crores. This takes the total FII sell figure for 2025, so far, to a massive Rs 2,07,568 crore. This largely explains India’s underperformance relative to other major markets this year.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.said: “It is important to understand a significant feature of the FII activity this year. FIIs, particularly the hedge funds, are selling in India and buying in other markets which are driven by AI trade. US, China, South Korea and Taiwan are regarded as AI winners while India is widely regarded as an AI loser.”
Valuation concerns
This perception is hugely influencing the FPI action in the ongoing global rally driven by AI trade, he said, adding that “the problem, however, is that AI valuations have reached elevated levels and further rallies from here run the risk of a bubble burst. This realisation is dawning on investors widely now. This may restrain sustained FII selling in India. If, along with this realisation, India’s earnings growth continues to improve, FIIs are likely to turn buyers. But this may take time.”
Earnings, derivatives watch
On the earnings front, quarterly results from prominent companies such as Bajaj Finance, ONGC, Bajaj Finserv, Biocon, Ashok Leyland, Asian Paints, Tata Steel, BPCL, Marico, and Oil India will be closely tracked for sectoral cues.
However, derivative cues signal positive bias.
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said the derivatives data suggests a defensive tone, with call writers aggressively adding positions at higher strikes, while put writers are simultaneously building exposure at lower levels — signalling an evolving phase of consolidation.
A substantial open interest (OI) buildup of 1.52 crore contracts at the 26,000 call strike underscores firm resistance ahead, whereas notable put OI of 1.25 crore contracts at the 25,300 strike reflects limited downside support, he said.
“The simultaneous rise in both call and put writing activity suggests growing neutrality among traders. The Put-Call Ratio (PCR) has inched higher to 0.88 from 0.63, pointing to a cautiously optimistic sentiment, with both buyers and sellers maintaining a tight grip on their respective positions,” he further said.