The stock market is expected to open on a cautious note on Tuesday, with global cues and rising oil prices weighing on sentiment, even as investors closely watch election results from Tamil Nadu and West Bengal.
Early signals from GIFT Nifty suggest a weak start. GIFT Nifty futures were trading at 24,077 at around 8:06 am, indicating that the Nifty 50 may open below Monday’s close of 24,119.30.
Aakash Shah, Technical Research Analyst at Choice Equity Broking Private Limited, said, “Indian equity markets are expected to open on a flat to mildly positive note, tracking GIFT Nifty at 24,082, up by 37 points, as sentiment remains cautious and Gift Nifty hold steady, amid ongoing developments in the Middle East and movement in prices.”
Global markets are not offering much support. Asian markets were down by around 0.8%, while US markets ended lower overnight. This weak global trend is likely to impact domestic sentiment at the open.
Oil prices have also been a key concern. Brent crude had jumped to an intraday high of $115.3 per barrel on Monday after tensions rose in the Middle East, especially around the Strait of Hormuz. While prices have eased slightly, Brent is still trading near $113 and remains elevated.
As per the latest data shared, Brent crude is currently around $113.05, while WTI crude is near $104.15, though both have seen some decline in early trade. Despite this cooling, oil prices remain high and continue to put pressure on markets.
India imports a large part of its oil needs. When crude prices rise, it leads to higher costs for companies and also increases inflation. This can impact both economic growth and company earnings.
Analysts say that even though there are positive triggers such as earnings and election clarity, high oil prices are cancelling out those gains.
Another key concern is the weak rupee. The Indian currency recently hit record low levels, closing at around 95.08 against the US dollar.
A weak rupee increases import costs, especially for oil, and reduces returns for foreign investors. This can lead to cautious investment flows and may limit market gains.
Markets will also track election results from Tamil Nadu and West Bengal today. Political clarity often helps markets, but analysts say the impact is usually short-term.
On Monday, markets had already reacted positively, with both and Nifty rising about 0.5%. However, whether this momentum continues will depend on broader factors like oil prices and global cues.
Apart from macro factors, company earnings will play a key role in today’s trade.
Key companies such as Larsen & Toubro, Mahindra & Mahindra and Hero MotoCorp are set to announce their quarterly results. These results may lead to stock-specific movements during the day.
There is some support from institutional investors. Foreign institutional investors (FIIs) turned net buyers on Monday after several sessions of selling, buying shares worth Rs 2,835.62 crore.
Domestic institutional investors (DIIs) continued their buying trend, purchasing shares worth Rs 4,764.16 crore, marking their seventh straight day of buying.
This buying activity could provide some support to markets, even if global and macro pressures remain.
Overall, the market setup suggests a weak or flat start, with pressure from high oil prices and a weak rupee. Election results may bring short-term movement, while earnings announcements will drive individual stocks.
Market direction through the day will depend on how these factors play out together.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)