Global cues indicate gap-down opening
Stock markets are likely to open sharply lower on Tuesday following weakness around the world. US stocks plunged sharply lower on Monday on recession fears amid a somersault on policy issues. Gift Nifty at 22,380 signals a gap-down opening of 140 points for Nifty.
Major Asian stocks are down around 2 per cent.
Osho Krishnan, Sr. Analyst, Technical & Derivatives of Angel One, said: As we look ahead, it appears that our market will continue to face significant challenges. The influence of global developments will likely play a crucial role in shaping initial trends. Considering these uncertain conditions, it is essential to prioritise robust risk management strategies. Also, one must exercise caution and refrain from engaging in aggressive trading practices to navigate this turbulent landscape effectively.
The weakness in rupee will further aggravate selling, said analysts.
Rahul Kalantri, VP Commodities, Mehta Equities, said: “The Indian rupee fell by 41 paise (0.47%) to close at 87.36 against the US dollar on Monday, marking its steepest single-day drop in over a month since February 5. This depreciation occurred despite the dollar index and crude oil prices reaching four-month and 22-month lows, respectively. Investor uncertainty led to increased demand for the US dollar as a safe-haven asset. Additionally, India’s ongoing negotiations for a bilateral trade agreement with the US also contributed to market volatility. Market participants are now closely monitoring consumer inflation data from both India and the US, set to be released on Wednesday, as this will influence expectations of rate cuts by the countries’ central banks. We expect the rupee to remain volatile this week amid volatility in the dollar index and in the global financial markets, and the pair could trade in the range of 86.90-87.70.”
According to Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd, said: “We expect the market to remain largely range-bound in the absence of any significant domestic trigger. Investors will closely monitor global developments, including the US tariffs, geopolitical negotiations and their impact on US dollar/crude oil prices for further cues.”
However, some analysts expect the market to see limited downside and buying interest at lower levels.
Emkay Global Research that hosted 11 companies in 5 cities during its maiden US Conference, resulting in ~100 investor meetings, said: “Overall management view is cautiously optimistic, with most players seeing growth and earnings moderation in recent quarters bottoming, and a gradual recovery playing out in FY26. Investors, at their end, are waiting for an earnings downgrade to draw to a close in order to turn positive, as they find valuations to be palatable following recent corrections in Indian equities,” it added.
Client Associates’ Perspective:
Client Associates, which manages $6 billion, believes that despite recent market corrections, Indian equities present a compelling long-term investment opportunity, with attractive valuations and strong domestic support from institutional investors. The firm expects rural demand recovery, a boost from government investments, and the ongoing favourable monetary policy to support economic growth and market performance.
“As the market experiences increased volatility, Client Associates advises investors to consider a diversified portfolio and to look beyond short-term market fluctuations to capitalise on the growth potential of Indian equities and fixed income instruments,” it said.
Technically, the market is at a crucial level.
Ajit Mishra – SVP, Research, Religare Broking Ltd, said: For the market to surpass the short-term resistance of the 20-day EMA at 22,700, a fresh catalyst is needed. “However, mixed global cues and the underperformance of the banking index remain key hurdles. We suggest continuing with a positive yet cautious approach in the prevailing scenario, with focus on stock selection and risk management,” he added.
