It was a cautious start for Dalal Street this Tuesday morning as investors weighed global signals with a mix of optimism and restraint. Gift Nifty hinted at a flat to slightly positive opening, indicating that traders are waiting for stronger cues before making big moves. The global setup looks uncertain, with the US markets ending on a positive note, but most Asian peers showing a muted reaction.
At 8:00 am, Gift Nifty was trading around 53 points higher, suggesting a marginally green start for Nifty 50. Analysts believe that while short-term sentiment remains supported by upbeat US data and easing bond yields, investors are hesitant to take heavy positions ahead of the crucial Federal Reserve policy decision later this week.
Market expert Rajesh Bhatia from Mehta Equities said, “The overall tone is positive, but traders are preferring to stay light. The Fed decision and US-China updates can turn sentiment either way. So, we might see more stock-specific movement than broad-based rallies.”
Mixed Global Cues Weigh on Early Sentiment
Global markets set the tone overnight. In the US, all major indices ended higher on Monday as investors bet on the Federal Reserve maintaining a dovish stance. The Dow Jones gained 0.8%, the S&P 500 climbed 0.6%, and the Nasdaq rose 0.9%. This momentum came after softer inflation readings boosted hopes of an early rate cut in December.
However, Asian markets failed to mirror that enthusiasm. Japan’s Nikkei slipped nearly 0.3% as traders booked profits after a solid run in the previous sessions. The Hang Seng index in Hong Kong traded mildly in the red, and South Korea’s Kospi fell around 1.2%. Analysts said geopolitical tensions in East Asia and uncertainty over crude oil prices kept investors cautious across the region.
The mixed global sentiment directly influenced Indian markets. With no major domestic trigger early in the week, traders are looking toward global developments, particularly the Fed’s commentary and the direction of US Treasury yields.
Domestic Market Recap: Bulls Take a Breather
On Monday, Indian indices ended on a firm note but showed some signs of fatigue. The Sensex climbed 0.67% to close at 84,778, while the Nifty 50 added 0.66% to settle at 25,966. Both indices hit fresh intraday highs but pared some gains later in the day as profit-booking emerged in IT and banking counters.
Sector-wise, the metal, PSU bank, and oil & gas indices led the rally, gaining 1–2%. However, the pharma and media sectors lagged, showing mild declines. Among the top gainers were Reliance Industries, SBI Life Insurance, Bharti Airtel, and Coal India. On the downside, Infosys, Kotak Mahindra Bank, and Adani Ports came under pressure.
The broader market also participated, with the Nifty Midcap and Smallcap indices rising nearly 0.8%. This shows that investor appetite remains intact, though short-term volatility is expected as the October F&O expiry approaches.
What’s Driving the Market Mood
Several factors are shaping market psychology this week:
- Federal Reserve Policy: The key event on every investor’s radar is the Fed meeting outcome. Traders are betting on a rate cut in December, but any hawkish signal could trigger short-term volatility across global markets.
- US-China Trade Optimism: Hopes of renewed economic talks between Washington and Beijing have lifted global sentiment. Any positive update on trade or technology cooperation could fuel risk appetite in emerging markets like India.
- Gold and Dollar Movement: Gold prices have softened after a strong rally, while the US Dollar Index remains steady around the 106 mark. A weaker dollar is usually favorable for emerging markets as it attracts foreign inflows.
- Crude Oil Prices: Brent crude has stabilized near $85 per barrel. This is a relief for India, given its heavy dependence on imported oil. However, any sudden spike could again weigh on inflation and fiscal metrics.
- F&O Expiry Pressure: With monthly derivatives expiry due this week, volatility may remain elevated. Traders are expected to adjust their positions, keeping the indices range-bound between 25,600 and 26,300 levels.
Expert View: “Buy on Dips” Strategy Still in Play
Market experts believe that India remains one of the most resilient equity markets globally. Strong domestic liquidity, consistent FII inflows, and improving macro fundamentals continue to support medium-term growth.
According to Amol Athawale of Kotak Securities, “The structure remains bullish as long as Nifty sustains above the 25,500 mark. A break above 26,200 could open the next leg toward 26,500–26,600. However, short-term traders should maintain strict stop losses because volatility could spike anytime.”
He added that sectors like banking, capital goods, and auto could continue to outperform, while IT and FMCG may stay sideways until global demand clarity emerges.
Technical View: Nifty in Consolidation Phase
From a technical perspective, Nifty is moving within a narrow range after strong gains in the past two weeks. Analysts expect a consolidation between 25,600 and 26,200 before a directional breakout.
Momentum indicators such as RSI and MACD suggest mild cooling-off, which could attract fresh buying on dips. On the other hand, a breach below 25,500 could invite short-term selling pressure.
Support levels are seen at 25,580 and 25,420, while resistance is expected near 26,250 and 26,400. Traders are advised to maintain a balanced approach with a focus on quality midcaps and defensive plays.
Outlook: Calm Before the Storm
In summary, the Indian stock market is likely to remain range-bound in the near term as global cues dictate movement. The next major trigger will come from the Federal Reserve’s decision and subsequent commentary. Until then, investors should expect limited directional movement with pockets of stock-specific action.
Long-term investors can use this phase to gradually accumulate quality names in sectors like banking, power, and manufacturing, which continue to show strong earnings momentum.
As the global market narrative shifts between optimism and caution, Dalal Street seems to be quietly waiting for the next big spark. For now, patience and selective buying remain the smartest trades in town.