The domestic markets are set to open with significant gains on Tuesday, boosted by positive global cues. Analysts anticipate that recent buying by foreign portfolio investors (FPIs) will support a market recovery. The proposal by market regulator SEBI to double the investment threshold for granular disclosures by FPIs to ₹50,000 crore is seen as a positive development that will address some of their concerns. In August 2023, SEBI had mandated FPIs holding over 50% of their equity AUM in a single corporate group or with an overall Indian equity market holding of more than Rs 25,000 crore to disclose detailed information on related entities.
Certain FPIs, such as those with a broad-based pooled structure or government ownership, have been exempted from additional disclosure requirements. This move is expected to attract higher fund flows from FPIs, who have been net sellers since September 2024. The Gift Nifty at 23,770 indicates a gap-up opening of around 75 points.
Osho Krishan, Senior Research Analyst at Angel One, highlighted the opportunity to capitalize on evolving market trends and strong momentum as the monthly expiry approaches. Anand Rathi Research’s market strategy report noted short-term volatility but a positive long-term outlook based on strong macro fundamentals, earnings growth, and attractive valuations. The report identified specific sectors likely to outperform or underperform in the near term.
In terms of historical market corrections, the Nifty50 typically rebounds within three months after declines. Despite geopolitical risks and other challenges affecting the market, FY26 earnings downgrades have been relatively mild, particularly for Nifty50. Meanwhile, Asian stocks are trading mixed in early deals.
Overall, the market is expected to remain bullish in the near term, driven by increased FPI buying and positive global cues. The outlook remains favorable for investors looking to capitalize on market opportunities in the current dynamic environment.
