Indian stocks are set for a cautious start on Tuesday, December 31, as GIFT Nifty futures show a negative opening. The index traded 177 points lower at 23,658.5, reflecting weaker global factors and higher market volatility.
Global markets have emotional weight
Wall Street closed in the red on Monday, with the Dow Jones, S&P 500, and Nasdaq down about 1 percent each due to reduced holiday trading volumes. Similarly, Asian stocks extended losses as technology-driven weakness weighed on markets. Hang Seng futures were down 0.2 percent, and Australia’s S&P/ASX 200 was down 0.5 percent in early trade.
Important levels to watch in 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 expected around 23,870 in the short term, according to technical analysts.
India VIX rises amid cautious sentiment
India’s VIX, a barometer of market volatility, rose 5.55 percent to close at 13.97 on Monday, indicating greater caution among investors.
Industry perspective
Banks and auto stocks may continue to face selling pressure, while the chemicals sector could see exceptional buying. FMCG stocks may have provided some stability, but the overall sentiment remained depressed due to weak signals from the IT and retail sectors.
Rupee at record low
The Indian rupee closed at its weakest level of 85.5350 against the US dollar on Monday, weighed down by a strong dollar and bearish momentum in the offshore Chinese yuan.
Activity of FII and DII
Foreign Institutional Investors (FIIs) were the biggest sellers, offloading shares worth Rs 1,893.16 crore. Domestic Institutional Investors (DIIs), however, provided some support, with purchases totaling Rs 2,173.86 crore.
Focus on the day
Investors will monitor global indices, FII/DII flows, and India VIX levels for trends. Resistance to broad indicators and sector-specific performance will be closely watched as the market wraps up the year.