Indian equities are likely to begin Tuesday’s session on a positive note as markets reopen after the Republic Day holiday. While early indications from GIFT Nifty point to a modest uptick, overall sentiment remains fragile amid persistent foreign fund outflows, weak global risk appetite, and concerns around earnings momentum. Traders are expected to stay guarded, with volatility likely to remain elevated.
In the previous trading session, benchmark indices extended their corrective phase. The Nifty 50 slipped closer to the crucial 25,000 mark, while the Sensex closed sharply lower, reflecting broad-based selling pressure. Financials, energy, and select consumption stocks led the decline, while IT stocks remained range-bound. Midcap and smallcap indices continued to underperform, highlighting sustained risk aversion and cautious positioning ahead of key macro and earnings cues. Market breadth remained negative, underscoring weak underlying participation.
From a technical standpoint, the Nifty continues to trade below its short-term moving averages, indicating a fragile setup. The 25,200–25,300 zone is now seen as immediate resistance, and any pullback towards this area may invite selling pressure. On the downside, 25,000 remains a critical psychological and technical support. A decisive break down below this level could accelerate weakness towards the 24,950–24,900 region in the near term. Momentum indicators remain subdued, though oversold conditions may result in brief, stock-specific relief rallies.
The Bank Nifty has shown relative resilience but remains unable to decisively reclaim the 59,000–59,200 resistance zone. Immediate support is placed near 58,100–58,200, and a breach below this could weigh further on banking sentiment unless earnings visibility improves.
Foreign Institutional Investors (FIIs) were net sellers, with net outflows of around Rs 4,113 crore in the cash segment, underscoring continued overseas risk aversion. In contrast, Domestic Institutional Investors (DIIs) stepped in as buyers, with net inflows of approximately Rs 4,102 crores, helping cushion the slide but not fully offsetting FII selling
Overall, markets may witness a hesitant opening with a positive to neutral bias. Traders are likely to remain selective, focus on earnings-driven opportunities, and maintain strict risk management, while investors may await stability near key support levels before deploying fresh capital.