India’s equity benchmarks are likely to open higher on Monday, tracking gains in other Asian peers, as US Federal Reserve Chair Jerome Powell hinted at an interest rate cut next month.
However, the tariff concerns and consistent FIIs selling is denting the sentiments at Dalal Street.
Nifty futures on the NSE International Exchange traded 48.80 points, or 0.20 per cent, up at 24,947, hinting at a positive start for the domestic market on Monday. Asian share markets rallied on Monday as investors celebrated the likely resumption of interest rate cuts in the US. Hang Seng surged more than 2 per cent, while KOSPI gained nearly a per cent. Nikkei was up half a per cent.
For Indian equities, support by decision to cut GST rates and S&P upgrade of India’s market outlook, both arriving at a crucial time to offset the drag from US tariffs, said Puneet Singhania, Director at Master Trust Group. “These developments, alongside steady domestic inflows, provide a counterbalance. Consumption and select sectors are expected to benefit from the GST cut,” he said.
Wall Street’s main indexes ended higher on Friday, with the blue-chip Dow hitting a record closing high. The Dow Jones Industrial Average rose 846.24 points, or 1.89 per cent, to 45,631.74, surpassing its most recent record close. The S&P 500 gained 96.74 points, or 1.52 per cent, to 6,466.91 and the Nasdaq Composite jumped 396.22 points, or 1.88 per cent, to 21,496.54.
The US dollar attempted on Monday to pull itself up from a four-week low on the euro after a dovish pivot from Federal Reserve Chair Jerome Powell sent it tumbling more than 1 per cent. The Indian rupee’s trajectory this week will be dominated by developments on US trade policy, with steep tariffs on Indian goods slated to take effect from Wednesday.
Commodity markets were encouraged by the drop in the dollar, with gold at $3,365 an ounce. Oil prices were further supported by the lack of progress on talks between Russia and Ukraine, which keeps sanctions on Russian supplies. Brent was a fraction firmer at $67.31 a barrel, while U.S. crude added 0.2 per cent to $63.78 per barrel.
Investors will monitor domestic data releases closely, along with the key IIP and GDP prints, which will serve as critical indicators of economic momentum, said Ajit Mishra, SVP of Research at Religare Broking. “On the global front, geopolitical developments and the market reaction to any dovish undertone from the US Fed Chair’s Jackson Hole remarks will remain key triggers,” he said.
Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 1,622.52 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 329.25 crore on a net-net basis. FIIs continued selling in August as FIIs have dumped Indian Equities worth Rs 24,564 in August 2025 so far.
When we examine the data for secondary and primary market inflows, it becomes evident that FIIs are still participating in the primary market, said Vipul Bhowar, Senior Director and Head of Equities at Waterfield Advisors. “This indicates their ongoing investment in new themes and businesses, while they are reducing their exposure to sectors that are experiencing slower growth.”
Nifty & Sensex outlook
The 25,000/81900 level or the 50-day SMA will be key for traders. Below this level, the correction could slip to the 20-day SMA, or around 24,730-24,700/81,100-81,000. Further downside may also continue, potentially dragging the index down to 24,600-24,500/80,700-80,400, said Amol Athawale, VP of technical Research at Kotak Securities.
“Conversely, a fresh uptrend rally is possible only after the index sustains above 25,000/81,900 or the 50-day SMA. The immediate resistance for the index would be at 25,200/82,500. A successful breakout above 25,200/82,500 could push the market towards 25,500/83,300,” he said.
Nifty50 suggests that the bulls may be losing grip, and a period of consolidation or a corrective move could be on the cards unless fresh positive triggers emerge, said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities. “The zone of the 100-day EMA of 24,650-24,600 level will act as important support for the index. While on the upside, the zone of 25,050-25,100 will act as a crucial hurdle for the index. Any sustainable move on either side will lead to a trending move in the index,” he said.
Nifty Bank
A strong bearish candle formed on the daily chart, closing below the key support level of 55,500, which reinforced the prevailing downside momentum. If this selling pressure continues and the index breaks below 55,000, it could trigger a deeper corrective move toward 54,900 (20-week EMA) and 54,450, said Choice Broking.
“On the upside, immediate resistance is seen around 55,500. A sustained breakout above this level could attract fresh buying, with potential targets at 55,750 and 56,000. Technical indicators also support a bearish outlook,” it added.
The Bank Nifty formed a big bearish candle, reflecting weakness. Immediate support for Bank Nifty lies at the 100-DEMA which is placed near 55,025, while a strong support base is placed around 54,900, said Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediates.
“A sustained move below 54,900 could extend the decline towards 54,500-53,900 levels. On the upside, the 55,950-56,160 zone will act as a key resistance area in the near term. Thus, traders are advised to remain cautious in Bank Nifty and avoid aggressive long positions,” he said.