GIFT Nifty futures point to a gap down start; markets to remain under pressure

Indian equities are set for a cautious start on Tuesday, December 31, as GIFT Nifty futures indicate a negative opening. The index traded 177 points lower at 23,658.5, reflecting weak global cues and heightened market volatility.

Global markets weigh on sentiment

Wall Street closed in the red on Monday, with the Dow Jones, S&P 500, and Nasdaq falling nearly one per cent each due to subdued holiday trading volumes. Similarly, Asian shares extended losses as technology-driven weakness weighed on markets. Hang Seng futures fell 0.2 per cent, and Australia’s S&P/ASX 200 dropped 0.5 per cent in early trade.

Key levels to watch for Nifty

The Nifty is expected to remain under pressure after slipping below its consolidation zone in the previous session. Support is seen at 23,400, while resistance is anticipated at around 23,870 in the short term, according to technical analysts.

India VIX rises amid cautious sentiment

The India VIX, a barometer for market volatility, climbed 5.55 per cent to close at 13.97 on Monday, signalling heightened caution among investors.

Sectoral outlook

Banking and auto stocks may continue to face selling pressure, while the pharma sector could see selective buying. FMCG stocks are likely to lend some stability, but overall sentiment remains subdued due to weak cues from IT and realty sectors.

Rupee at record low

The Indian rupee closed at its weakest-ever level of 85.5350 against the US dollar on Monday, weighed down by a firm dollar and bearish momentum in the offshore Chinese yuan.

FII and DII activity

Foreign Institutional Investors (FIIs) were net sellers, offloading shares worth Rs 1,893.16 crore. Domestic Institutional Investors (DIIs), however, provided some support, with net purchases of Rs 2,173.86 crore.

Focus for the day

Investors will monitor global cues, FII/DII flows, and India VIX levels for directional trends. Resistance for the broader indices and sector-specific performances will be closely watched as the market wraps up the year.