India’s equity benchmarks are poised to open higher on Tuesday, after struggling to hold on to the record highs hit in the previous session due to profit booking and foreign outflows.
GIFT Nifty futures were trading at 26,330.5 as of 08:14 a.m. IST, indicating that the Nifty 50 will open above Monday’s close of 26,175.75.
The Nifty and Sensex scaled new peaks after 14 months on Monday, rising about 0.5% each to record highs of 26,325.80 and 86,159.02, respectively, but struggled to hold on to gains due to profit-booking.
Improving earnings, stable growth, steady flows and supportive monetary and fiscal policies boosted the benchmarks, which are yet to beat the record closings hit in September 2024.
“Monday marked the third consecutive weak close, indicating extended consolidation at record-high levels along with selling pressure,” said Vatsal Bhuva, technical analyst at LKP Securities.
A potential U.S.-India trade deal and delivery on the earnings promise in the current quarter are essential to sustain the market rally, two analysts said.
Meanwhile, foreign portfolio investors offloaded Indian shares worth 11.71 billion rupees ($130.6 million) on Monday, while domestic institutional investors purchased shares worth 25.59 billion rupees.
The rupee depreciated to a record low on Monday as muted trade flows and U.S.-India trade talk uncertainty weighed.
Other Asian markets were mixed on the day. Overnight, Wall Street equities snapped a five-session rally, while investors awaited a Federal Reserve rate cut next week.
Domestic rate-sensitive sectors will be in focus over the next few sessions ahead of the Reserve Bank of India’s rate decision on Friday.
India’s better-than-expected economic growth in the September quarter has cast doubts over further rate easing. Earlier, the RBI was widely expected to cut rates at its meeting on December 5.
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