Dalal Street traders anticipate a flat opening Monday as Wall Street’s record-breaking rally clashes with persistent domestic headwinds. The S&P 500’s chipmaker-led surge provides modest support, but FII selling pressure, uneven Q3 earnings, and Union Budget 2026 anticipation foster stock-specific volatility rather than broad directional moves.
Wall Street Boost vs Domestic Jitters
Friday’s US markets delivered a morale booster, with S&P 500 hitting all-time highs on tech strength. Asian indices opened steadily, potentially cushioning Nifty’s 25,700 support test. However, five straight losing sessions—Sensex down 605 points to 83,576, Nifty at 25,683—highlight seller dominance. Midcaps (-1%) and smallcaps (-1.8%) suffered most, with auto, FMCG, realty, and consumer durables leading declines.
Q3 Earnings Take Centre Stage
Corporate results dominate sentiment. TCS and HCLTech initiate IT sector reporting, promising sharp reactions. Avenue Supermarts (DMart) posted robust Q3 profit and revenue growth, bolstering consumer stocks. Expect sector rotation as earnings differentiate outperformers from laggards.
Institutional Tug-of-War Continues
FIIs persist as net sellers, trimming equity exposure amid global trade uncertainties. DIIs counter with steady buying, absorbing selling pressure. This institutional balance remains pivotal for market direction, with FII flows particularly sensitive to US-India tariff developments and Trump-era IEEPA Supreme Court verdict.
Key Macro Triggers
Union Budget 2026 proximity amplifies volatility. US Fed rate cut expectations, gold/silver record highs, and safe-haven demand reflect geopolitical overhang. US-India trade policy risks loom large alongside global commodity fluctuations.
Friday’s Sector Performance Breakdown
IT, PSU banks, and oil & gas stocks provided rare bright spots amid broad-based declines. Defensive positioning evident as Nifty volatility persists. Monday’s session likely extends stock-picking approach rather than sectoral bets.
Trading Strategy Outlook
Traders advised selective positioning during early dips rather than panic selling. Global risk-on sentiment intact despite domestic consolidation. Stock-specific action dominates as Q3 results unfold and budget speculation intensifies. Volatility likely elevated but panic selling appears exhausted after five-session correction.
Technical Levels to Monitor
Nifty support cluster at 25,600-25,683 with resistance near 25,900-26,000. Sensex 83,000 psychological support critical. Bank Nifty tests 57,000 pivot amid mixed financial sector cues. India VIX readings will dictate intraday swings.
The positively cautious tone reflects balanced risk-reward setup. Global strength provides floor while domestic triggers cap immediate upside. Earnings season outcomes and institutional flows determine whether consolidation extends or reversal materializes.
