Nifty 50 set for higher opening, tracking Asian markets

Markets to open higher: In a potential rebound from the previous session's decline, benchmark Nifty 50 index is anticipated to open higher on Tuesday, mirroring a positive trend in Asian markets. 

As of 8:09 am, the GIFT Nifty was trading at 21,704.50, indicating an opening above Monday's close of 21,513.00.

However, Prashanth Tapse, Senior VP (Research), Mehta Equities Limited said, “Monday's session at Dalal Street was unsettling for perma-bulls as the market dropped sharply. Market sentiments were rattled by Nifty's downturn, driven by inflationary concerns highlighted in Friday’s US jobs data.”

He further said, “Futures traders now project a 62 per cent chance of a Federal Reserve interest rate cut in March. Despite the gloom, there are positive notes - both FIIs & DIIs were net buyers, and WTI crude futures dropped 3.5 per cent due to Saudi Arabia's price cuts and increased OPEC output.”

The broader Asia-Pacific region exhibited a recovery, with MSCI's index outside Japan gaining approximately 0.5 per cent, rebounding from a 0.85 per cent dip on Monday.

The positive sentiment is partially attributed to gains on Wall Street, where equities closed higher, and US Treasury yields retreated in anticipation of Thursday's crucial inflation reading.

Market analysts suggest that in the near term, the trajectory of domestic equities will be influenced not only by US inflation data but also by corporate earnings and domestic macroeconomic indicators. Monday witnessed a 0.91 per cent dip in the Nifty, primarily driven by concerns over earnings in the financial and consumer sectors.

Morgan Stanley analysts, led by Ridham Desai, anticipate increased volatility in domestic markets. Despite stretched valuations, India remains one of the top picks in emerging markets, given the momentum in earnings growth and flexible inflation targetting.

Foreign institutional investors displayed a net buying activity of shares worth Rs 16.03 crore on Monday. Simultaneously, domestic investors acquired a net Rs 156.96 crore worth of shares, as per exchange data. 

Notably, December witnessed record monthly Foreign Portfolio Investment (FPI) buying in Indian equities, while mutual fund assets in India reached a milestone of Rs 50 lakh crore.

Stocks to watch 

Eicher Motors: Auto maker's unit Royal Enfield signed a pact to invest Rs 3,000 crore in Tamil Nadu for automobile component manufacturing.

Tata Motors: Subsidiary Jaguar Land Rover posted 27 per cent year-on-year growth in sales in December quarter.

Bajaj Auto: Company approved proposal to buyback shares not exceeding Rs 4,000 crore at a price of Rs 10,000 per share.

BEML: Company bagged order worth about Rs 330 crore from Ministry of Defence

(With Reuters Inputs)