Domestic markets are likely to open on a flat note in the positive zone. Gift Nifty at 26,230 signals marginal gains for domestic markets. FPIs, after remaining positive in the last few days, turned net sellers again on Tuesday. Market participants will closely watch the behaviour of foreign portfolio investors.
Ponmudi R, CEO of Enrich Money, said Indian equity markets are expected to begin today’s session with a mildly positive yet cautious bias, supported by steady global cues and resilient domestic fundamentals, while holiday-thinned volumes keep volatility contained. “With most global markets operating amid holiday-thinned liquidity ahead of Christmas, participation is likely to remain selective, favouring consolidation rather than aggressive directional moves. Risk sentiment remains stable, reflected in subdued volatility levels, indicating that the market is in a pause phase rather than a distribution phase,” he added.
Motilal Oswal Financial research, after analysing Q2 results, said that earnings of India Inc are likely to improve going forward. “Our analysis of recent earnings revisions for MOFSL universe reveals that the past trend of easing earnings cuts’ intensity has gradually given way to earnings raises. For the three months ending 2QFY26 earnings season, the aggregate FY26 PAT estimate of MOFSL universe was raised by 2 per cent—the first instance of an upgrade since the end of 1QFY25 earnings season—comparing favourably to the earlier readings of -6 per cent/-3 per cent/-4 per cent/-2 per cent for the three months ending with earnings season of 2QFY25/3QFY25/4QFY25/1QFY26.”
Mid-caps posted maximum earnings upgrades at 3.1 per cent, while large-caps were also strong at about 2 per cent, it said adding that small-caps were the laggards, with continuing downgrades of 5.5 per cent. “This momentum has continued post the 2QFY26 earnings season as well. FY27 PAT estimates for the MOFSL universe were albeit flat in 2QFY26 (but raised by 0.5% post 2QFY26). Nonetheless, the trend of easing intensity of earnings cuts has been evident for FY27 estimates as well, with readings of -4%/-3%/-1%/0% in 3QFY25/ 4QFY25/1QFY26/2QFY26,” it further said.
Meanwhile derivative trading continues to present a positive signal.
Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said the derivatives space echoes a growing optimistic bias. “Put writers have aggressively added fresh positions at at-the-money and nearby strikes, reinforcing a strong support base with every minor decline. In contrast, call writers have reduced exposure at lower strikes and rolled over positions to higher levels, signalling expectations of a continued ‘buy-on-dips’ environment.”
The Put-Call Ratio (PCR) has improved to 1.08, highlighting a rise in bullish sentiment and indicating that buyers are actively defending lower levels.
Volatility moderated further, with India VIX declining by 3.07 per cent to 9.377, reflecting easing market anxiety and continued comfort among participants. Derivatives data shows aggressive call writing at the 26,200 strike, while strong put open interest at the same level reinforces the importance of 26,200 as a key pivot zone. A sustained close above 26,200 will be essential to extend bullish momentum, whereas failure to decisively cross this level could result in continued consolidation in the near term, said Amruta Shinde, Technical & Derivative Analyst, Choice Broking.