Domestic markets are expected to open slightly lower on Tuesday, influenced by mixed signals from global markets. The Gift Nifty is set at 26,160, indicating a potential drop of 20 points for Nifty at the market’s opening, as opposed to the Nifty futures value of 25,180. Analysts predict a range-bound movement in the market, alongside stock and sector-specific activities.
Ponmudi R, CEO of Enrich Money, remarked that Indian equities are poised for a stable yet cautious start, with some mild profit-taking anticipated following a recent rally. He noted that the broader market sentiment remains positive, buoyed by strong consumption trends during the ongoing festive season, particularly in the automobile and consumer durables sectors. Recent GST rate cuts and measures from the RBI to support growth also contribute to this positive outlook.
In the context of market volatility, the India VIX — a key indicator — increased by 1.32% to 10.19, suggesting subdued volatility amidst ongoing uncertainties.
Amruta Shinde, a Technical and Derivatives Analyst at Choice Broking, highlighted that open interest (OI) in the derivatives market shows the highest call writing at the 25,100 strike, while the maximum put OI is concentrated at the 25,000 mark. This setup indicates significant resistance around 25,100 in the near term.
Attention is now turning towards the second-quarter performance and business outlook for Indian corporates. According to MOTILAL OSWAL Financial Services, the earnings for its Universe/Nifty-50 are anticipated to grow by 9% and 6% year-over-year for the second quarter of FY26. Excluding the financial sector, earnings are expected to rise by 16% and 10% year-over-year, while excluding metals and oil and gas, earnings are projected to increase by 6% and 4% year-over-year.
Overall earnings growth is expected to be modest, primarily driven by the Oil and Gas sector (+25% YoY), Non-Banking Financial Companies lending (+21%), Telecom (transitioning from losses to profits), Metals (+10%), Technology (+6%), Cement (+62%), Capital Goods (+14%), and Healthcare (+10%). These sectors are estimated to account for 95% of the incremental year-over-year earnings growth. Conversely, private banks and public sector banks are expected to negatively impact earnings, both projected to decline by 7%.
MOTILAL OSWAL also forecasts FY26 earnings growth at 12% year-over-year for its Universe and 9% for Nifty-50. They adjusted their FY26E/FY27E Nifty earnings per share (EPS) downward by 1.1% and 1.7%, respectively, predicting an 8% and 16% year-over-year increase to Rs 1,096 and Rs 1,274. The reduction in earnings estimates is primarily attributed to sectors such as metals, cement, banking, automobile, and technology.
Despite the exit of foreign portfolio investors, analysts expect domestic institutions to continue supporting equities.
