Indian stock markets are poised for a subdued, potentially lower opening on Tuesday, May 13, as investors likely look to book profits following a spectacular rally in the previous session.
While positive global cues provided some support overnight, domestic factors including ongoing Q4 earnings, upcoming inflation data, and the recent surge itself suggest a period of consolidation or pullback.
Monday witnessed an extraordinary day on Dalal Street.
The benchmark Nifty 50 index closed decisively above the 24,900 mark, settling at 24,924.70 after a massive gain of 916.70 points or 3.82%.
The BSE Sensex mirrored this euphoria, jumping an impressive 2,975.43 points, or 3.74%, to close at 82,429.90.
This powerful rally was fueled by a potent combination of positive domestic and international news, primarily the de-escalation of military tensions between India and Pakistan following a ceasefire agreement, and optimism stemming from an apparent trade deal between the US and China which included a 90-day tariff relief period.
The surge saw broad-based buying across sectors like real estate, energy, telecom, infrastructure, and banking.
Early cues point to a softer start
However, early indicators for Tuesday’s session suggest a more cautious mood.
Gift Nifty futures on the NSE International Exchange were trading around the 24,914 – 24,922 level (down approximately 26 to 130 points from Nifty futures’ previous close, depending on the specific early reading), signaling a potential gap-down or weaker start for the domestic market.
This pullback would be natural after such a significant one-day gain, as traders look to secure profits.
Wall Street rallies, Asia mixed
Overnight, Wall Street’s three major indices closed sharply higher, buoyed by the US-China trade deal news which included a 90-day tariff reprieve.
The S&P 500 gained 3.26% to its highest close since early March, the Nasdaq Composite soared 4.35% (highest since late February), and the Dow Jones Industrial Average climbed 2.81%.
Asian markets on Tuesday presented a more mixed picture. While some, like Japan’s Nikkei (up ~1.7%) and South Korea’s Kospi (up ~0.65%), traded higher, Hong Kong’s Hang Seng was notably down around 1.25% in early deals, indicating some regional divergence despite the positive US lead.
Key factors influencing today’s trade
Several factors will be closely watched by investors today:
- Inflation data: The release of domestic inflation figures will be a key data point, potentially influencing expectations around future Reserve Bank of India policy.
- Q4 earnings: The ongoing fourth-quarter earnings season continues to provide stock-specific triggers and insights into corporate health.
- FII flows: Foreign Institutional Investors (FIIs) returned as net buyers on Monday, purchasing equities worth Rs 1,246.48 crore after a brief pause. Sustained FII interest is crucial for market momentum.
- Geopolitical monitoring: While the ceasefire has brought relief, investors will remain vigilant for any further developments in India-Pakistan relations.
- Technical levels: After Monday’s surge, where Nifty touched an intraday high of 23,944 before closing even higher, traders will be watching key support and resistance levels to gauge if the upward momentum can be sustained or if consolidation is in order.
Market experts anticipate that while the underlying positive domestic cues and global trade relief provide a supportive backdrop, the sheer magnitude of Monday’s rally makes some profit-taking or consolidation a likely scenario for Tuesday’s session.
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