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Domestic markets are expected to open on a cautious note on Monday amid weak global cues. Gift Nifty at 25,070 signals a flattish opening, as analysts expect moderation in the current “pullback” rally.
Ajit Mishra – SVP, Research, Religare Broking, said: With no major global or domestic events scheduled, the market focus is expected to shift towards domestic earnings and high-frequency economic data for directional cues. Updates on global trade deals and their impact on global markets will also be closely tracked. Participants will continue to monitor foreign capital flows, which have played a significant role in sustaining the current rally.
Experts believe the market will witness consolidation at current levels and a lot of portfolio churning is likely to happen.
FPI flows
Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments, said: FIIs, who were sellers in the first three months of 2025, having sold equity for ₹1,16,574 crore during this period, turned buyers in April with a buy figure of ₹4,243 crore. This change in FII strategy from selling to buying accelerated in May, with big buying of ₹23,778 crore through May 16. “With the global trade scenario improving after the pause in trade war between the US and China and the end of the India-Pak conflict, the investment scenario has improved. The growth prospects in US, China, Japan and the EU continues to be challenging, while India is expected to clock a growth rate of above 6 per cent in FY26. Importantly, with inflation in India under control and the MPC expected to cut rates twice or thrice more in this rate cutting cycle, the macro construct in India looks good. He said FIIs are likely to continue their buying in India. “Therefore, large caps will be resilient,” he added.
Meanwhile, Asian stocks are moderately down in early trade on Monday despite a strong Wall Street closing on Friday.
Technical view
According to technical experts, the current bullish trend is likely to continue.
Rohan Shah, Technical Analyst at Asit C Mehta Investment Interrmediates Ltd, said: The market has transitioned into a “buy on dips” mode following the index’s breakout above the 23,800–24,000 resistance zone. ‘Last week, Nifty surpassed the 61.8% retracement level of its prior decline, closing at a five-month high. This positive momentum is likely to continue, with an anticipated move towards the 25,800–26,000 zone — a region that aligns with a historical gap and another key retracement level,” he said, adding: “Broad-based market participation and improving breadth support this outlook, making any pullback a potential buying opportunity.
On the downside, crucial support is expected around the 24,500–24,300 levels, he said.
F&O pointer
However, trading in the F&O market signals a negative bias, according to analysts.
“The derivatives landscape has started to tilt slightly in favour of the bears. While call writers actively added positions at higher strikes, put writers held their ground at lower levels — a typical sign of a consolidative market, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities. The Put-Call Ratio (PCR) slipped sharply from 1.08 to 0.75, signalling a shift in sentiment slightly skewed toward the bears, he said.
India VIX, however, dropped another 2.03 per cent to close at 16.55. “With a sharp weekly decline of over 23.55 per cent, the cool-off in volatility reflects easing market anxiety. A lower VIX typically coincides with trending markets, especially when bulls are gradually asserting their dominance,” he further added.
Published on May 19, 2025
This article first appeared on The Hindu Business Line
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