The domestic markets are expected open with sharp gains on Tuesday amidst positive global cues. According to analysts, buying by foreign portfolio investors in recent days will help in market recovery. According to them, a proposal to double the investment threshold for granular disclosures by foreign portfolio investors (FPIs) to ₹50,000 crore by market regulator SEBI will bode well for and allay some of their concerns. In August 2023, SEBI had directed FPIs, who held over 50 per cent of their equity AUM in a single corporate group or with an overall holding in Indian equity markets of more than Rs 25,000 crore, to disclose granular details of all entities holding any ownership, economic interest, or exercising control in the FPI.

Certain FPIs, including those having a broad-based, pooled structure with widespread investor base or those having ownership interest by the government or government-related investors have been exempted from such additional disclosure requirements, subject to certain conditions.

Following this, analysts expect higher fund flow from FPIs, who have been sellers in the market from September 2024.

Gift Nifty at 23,770 signals a gap-up opening of about 75 points.

Osho Krishan, Senior Research Analyst, Technical & Derivatives, Angel One, said: “Looking ahead, we have a promising opportunity to capitalise on the significant shifts in market trends alongside the strong momentum as we approach the monthly expiry. With a positive outlook, one must consider dips in the market as valuable buying opportunities. Implementing a trailing stop loss will also help in securing profits as we navigate this dynamic environment.”

In a market strategy report, Anand Rathi Research said the market will remain volatile in the shortterm, but looks attractive for the long term. “Despite short-term uncertainties clouding investor sentiment, strong macro fundamentals, earnings growth and valuations support the positive medium-to-long-term outlook. With Nifty50 at 17.8x one-year forward earnings, trading at a 5.4% discount to its 5-year median and 12.9% to its 10-year median, we see opportunities for selective stock picking, favouring large-caps and mid-caps over small-caps,” it added.

 Near-term underperformers include auto, apparel retail and staples, while jewellery retail, value-retail, hospitality and large-ticket durables are likely to outperform, the report said, adding that Infra spending remains robust, making cement and related sectors attractive. “Metals & mining turned positive, while IT remains weak due to US policy risks. BFSI remains a preferred sector, with strength in large banks and NBFCs.”

Historically, Nifty50 corrected yearly, with about 63 per cent of declines up to 15 per cent and 26 per cent between 15 per cent and 30 per cent. Currently, it’s down 10.9 per cent since September 2024 due to geopolitical risks, GDP slowdown and foreign liquidity reversal. Midcap150 and Smallcap250 indices, meanwhile, fell 14.6% and 18.2%, respectively. Nifty50 typically rebounds within three months after such corrections.” FY26 earnings downgrades remain mild (1.5% for Nifty50 vs. 9.9% for Midcap150 and 11.3% for Smallcap250), thereby highlighting that Nifty50’s valuation de-rating has been the most significant,” Anand Rathi further said.

Meanwhile, Asian stocks are mixed in early deal.

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