Markets likely to open weak amid rupee pressure, FPI outflows

Indian equity markets are likely to open on a cautious to negative note amid a weakening rupee, sustained foreign portfolio investor (FPI) outflows and mixed global cues, analysts said
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Domestic markets are likely to open on a negative note amid a weakening rupee and FPI outflows. Mixed global cues to keep the market under pressure, said analysts, as FPIs are in no mood to buy Indian stocks and prefer to offload more shares.
Gift Nifty at 26,030 indicates a flat to negative note. Analysts said mid- and small-cap stocks will continue to remain under pressure,

Ponmudi R, CEO of Enrich Money, said Indian markets are likely to open on a cautious note, tracking subdued global cues. “Major equity indices on Wall Street closed lower amid a risk-off sentiment ahead of key economic data releases, including non-farm payrolls, retail sales, and inflation figures, which could influence the future course of monetary policy. Asian markets also opened lower, with cautious traders paring positions ahead of the Bank of Japan’s crucial monetary policy decision later this week,” he added.

Meanwhile, the derivative market is also sending cautious signals.

According to SAMCO Securities, the derivatives setup reflects a constructive yet cautious undertone. Put writers have aggressively added fresh positions at at-the-money and nearby strikes, strengthening the support base during declines. Meanwhile, call writers have partially unwound their positions and rolled over to higher strikes, indicating expectations of continued consolidation rather than an immediate breakout,” the brokerage said.

The Put-Call Ratio (PCR) has climbed to 1.21 from 1.13, reflecting a rise in optimistic positioning and indicating that buyers continue to maintain relatively aggressive stances at lower levels, it further said.

According to Ponmudi,on the domestic front, persistent FII outflows and continued pressure on the rupee near record lows remain key near-term headwinds. “However, strong participation from domestic institutional investors and retail flows continues to provide a cushion against deeper downside risks. In this backdrop, markets are expected to respect key technical levels rather than exhibit aggressive trending behaviour,” he added.