GIFT Nifty futures up 110 points; markets likely to open on a positive note

The trading session today is set to open on a positive note, with GIFT Nifty futures trading 110 points higher at 22,921, indicating a recovery after Monday's weak performance. However, market sentiment remains fragile due to global headwinds and ongoing foreign institutional investor (FII) outflows.
Nifty's short-term outlook remains negative

Despite the uptick in GIFT Nifty, the short-term trend of Nifty continues to be bearish. The index is hovering near the critical support zone of 22,700-22,650, close to the 38.2 per cent Fibonacci retracement level. Nagaraj Shetti of HDFC Securities highlights 23,000 as the immediate resistance, with a break above this level needed to regain bullish momentum.

Volatility rises, reflecting market jitters

The India VIX, a key fear gauge, rose 8.2 per cent on Monday to close at 18.13, signalling heightened uncertainty. The market's direction will hinge on domestic earnings, global cues, and developments ahead of the Union Budget later this week.

FII/DII action: Contrasting flows

Foreign portfolio investors (FPIs) remained net sellers, offloading Rs 5,015 crore worth of equities on Monday. In contrast, domestic institutional investors (DIIs) provided some support, with net purchases of Rs 6,642 crore. Notably, the net short positions of FIIs declined to Rs 2.79 lakh crore from Rs 3.09 lakh crore recorded last Friday.

Global markets: Mixed trends dominate

Wall Street witnessed a turbulent session, with the Nasdaq dropping 3.1 per cent amid pressure on AI-related stocks. Asian markets mirrored this weakness, with Japan's Topix falling 0.6 per cent, while Hang Seng futures gained 0.8 per cent. European market futures remained subdued, with Euro Stoxx 50 futures down 0.6 per cent.

Commodity watch: Gold gains as rupee weakens

Gold prices firmed as investors awaited the Federal Reserve's policy meeting later this week. Meanwhile, the rupee depreciated by nine paise to close at 86.31 against the dollar, weighed down by strong demand for the greenback.

Stocks in F&O ban

Indiamart, Manappuram, MGL, and PNB are under the F&O ban today, as these stocks crossed 95 per cent of the market-wide position limit.

Key levels to watch

Market participants should monitor Nifty's 22,700 support level and 23,000 resistance zone for signs of reversal or further downside.