Sensex, Nifty likely to open in red, FIIs continue selling spree; GIFT Nifty futures down 66 pts

Indian equity markets ended Friday's session in the red, weighed down by persistent selling pressure from foreign investors and lacklustre global cues. The benchmark indices saw notable losses, while broader markets underperformed significantly. The US Federal Reserve's recent decision to cut its benchmark lending rate by 25 basis points did little to buoy investor sentiment, given the ongoing concerns about economic uncertainty.

FIIs continue relentless selling, impact evident on sentiment

Foreign Institutional Investors (FIIs) remained net sellers for the 29th straight session, pulling out Rs 1.41 lakh crore. This persistent sell-off has dampened market sentiment, with analysts predicting a range-bound movement in the coming sessions. The focus will now be on stock-specific actions, particularly as the last set of Q2 earnings results are expected this week.

GIFT Nifty hints at negative opening

GIFT Nifty, the new avatar of SGX Nifty, indicated a weak start for Indian markets on Monday, trading down by 66 pts, or 0.27 per cent, at 24,133. Market experts suggest that concerns over global economic conditions and subdued quarterly earnings could keep investors cautious in the short term.

Key technical levels to watch for Nifty

The short-term trend for Nifty remains choppy, with consolidation expected to continue. According to Nagaraj Shetti of HDFC Securities, key support is seen at the 23,800 mark, while resistance levels stand at 24,250. Traders may witness heightened volatility if these levels are breached.

On the F&O ban list for Monday are ABFRL, Granules, and Manappuram, as they have crossed the 95 percent market-wide position limit. Investors should exercise caution when trading in these counters, given the restrictions.

US markets rally, Asian markets mixed

US markets wrapped up last week on a positive note, with the S&P 500 briefly surpassing the 6,000 mark. Optimism surrounding pro-business policies from the Republican majority boosted investor sentiment. In contrast, Asian stocks faced a mixed opening on Monday as weak inflation data from China added to concerns about the region's economic outlook.

Rupee hits fresh low, oil prices decline

The Indian rupee extended its decline, closing at a new lifetime low of 84.37 against the US dollar. Persistent foreign fund outflows have kept pressure on the domestic currency. Meanwhile, oil prices slipped amid easing concerns over US supply disruptions and disappointing stimulus measures from China, which weighed on hopes for fuel demand growth.

FII/DII data: Continued divergence in market participation

Foreign investors remained net sellers, offloading equities worth Rs 3,404 crore on Friday. However, Domestic Institutional Investors (DIIs) showed a contrasting trend, purchasing stocks worth Rs 1,748 crore, providing some relief to the market.

With mixed global cues and ongoing FII outflows, analysts expect the markets to remain volatile. However, the final leg of Q2 earnings could trigger stock-specific actions, offering potential opportunities for investors. Additionally, investors will keep a close watch on US inflation data and comments from Federal Reserve officials for further cues.