Indian benchmark indices are likely to open on a muted note on Tuesday, despite positive action in the Asian peers after a holiday bound Monday at the Wall Street.
Traders will be taking cues on the tariff news amid strong GDP numbers by India Q1. Investors girded for a slate of economic data this week.
Nifty futures on the NSE International Exchange traded 3 points, or 0.01 per cent, down at 24,745, hinting at a flat start for the domestic market on Tuesday. Asian stocks were trading higher on Tuesday. Nikkei and Hang Seng added up to 0.25 per cent each, while KOSPI gained 0.80 per cent for the day.
There is optimism over PM Modi’s meeting with his Chinese and Russian counterparts in the ongoing SCO summit in China, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “The domestic macro backdrop and demand environment remains constructive, though the overhang of 50 per cent US tariffs and persistent FII selling could keep the market range bound,” he said.
Oil prices rose on Tuesday as concerns about supply disruptions grew amid an escalation of the conflict between Russia and Ukraine. Brent crude added 40 cents, or 0.59 per cent, to $68.55 a barrel by 0149 GMT, while US West Texas Intermediate crude was at $65.06 a barrel, up $1.05, or 1.64 per cent.
The US stock market observed a holiday on Monday, September 01 on the account of Labour Day. A holiday on Wall Street left shares around the world free to go their own ways on Monday, with Chinese tech names surging and Europe steady, while European long-dated bonds remained under heavy pressure.
The US dollar made a limp recovery in early Asian trade after days of selling, ahead of the US markets reopening later on Tuesday after the Labor Day holiday. The dollar index was last up 0.1 per cent at 97.709, having touched its lowest on Monday since 28 July after five consecutive days of loss.
In commodity markets, gold hit a record high, benefitting from the dollar’s softness and the outlook for lower US rates. The metal rose to $3,503.32. Trump has criticized the Fed and its chair, Jerome Powell, for months for not lowering rates, and recently took aim at Powell over a costly renovation of the central bank’s Washington headquarters.
Despite India’s robust real GDP growth, persistent foreign fund outflows and export-related challenges amid tariff headwinds could keep participants cautious, said Ajit Mishra, SVP of Research at Religare Broking. “We recommend focusing on sectors and themes showing relative strength for long trades, while staying selective in others,” he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,429.71 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,344.93 crore on a net-net basis.
Nifty & Sensex Outlook
For traders now, as long as the market trades above 24,500/80,000, the pullback formation is likely to continue. On the higher side, it could bounce back to the 20-day SMA or 24,700/80,500, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “Further upside may also continue, potentially lifting the market up to 24,800/80,800. On the flip side, if the market falls below 24,500/80,000, traders may prefer to exit their long positions,” he said.
Traders may look for follow-through strength and confirmation from momentum indicators before turning aggressively bullish. The zone of 24,710-24,740 will act as an important hurdle for the index, said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.
“Any sustainable move above the level of 24,740 will lead to extension of the pullback rally upto the 24,900 level. While on the downside, the zone of 24,500-24,470 will act as immediate support for the index. Any sustainable move below the level of 24,470 will lead to its southward journey. In that case, it is likely to test the 24,200 level,” he said.
Nifty Bank outlook
Nifty Bank took strong support from its long-term EMA and rebounded, eventually closing on a positive note near the 54,000 mark. On the daily chart, this price action reflects renewed strength after recent consolidation, suggesting buyers are active at lower levels, said Hardik Matalia, Derivative Analyst of Research at Choice Equity Broking.
“Going forward, immediate support is placed at 53,800, followed by 53,500, and a break below these levels could invite further weakness. On the upside, immediate resistance is seen at 54,500, with the next hurdle in the 54,800-55,000 zone. A decisive move above this range may open the door for further gains,” he said.
Nifty Bank is holding above the 200 days EMA placed around 23,500 will lead to consolidation in the range of 53,500-55,000 in the coming sessions, said Bajaj Broking. “It has immediate support at 53,200-53,500 being the confluence of the 200 days EMA and the low of May 2025. A breach below the same will signal acceleration of decline towards the key support area of 52,500-52,000 levels.”