Flat to positive opening seen for Indian stocks amid cautious mood
Analysts expect selling pressure to intensify after the open, with several mid- and small-cap stocks likely to face a bear onslaught
Indian stock markets are poised for a mixed start on Tuesday, with the Nifty index opening flat-to-positive at 22,905, according to initial data. However, analysts anticipate a surge in selling pressure in the Mid and Small-cap segments. Global macro concerns, including heightened tensions between the US and Iran, rising Brent crude prices above $105 a barrel, and elevated US treasury yields, continue to weigh on investor sentiment.
Ajit Mishra, SVP of research at Religare Broking, attributes the negative tone to erratic monsoon updates from several states and foreign selling. Ankur Punj, Managing Director at Equirus Wealth, warns of a cautious and negative bias in the near to medium term due to the backdrop of high US bond yields and overseas fund outflows.
Despite these challenges, Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, notes that India's industrial output resilience may provide some support for cyclical stocks. Motilal Oswal Private Wealth's latest Alpha Strategist report for September 2026, titled "A Tale of Two Currents," highlights the divergence between intensifying global macro headwinds and strengthening domestic fundamentals in India.
The report attributes the pressure on equity valuations to rising energy costs, stronger global yields, and sustained foreign selling. The firm maintains a Neutral view on equities, with a strategic recommendation of 40% Hybrid/Large Caps, 10% Global Equities, and 50% Mid & Small Caps, favoring lump-sum deployment in hybrid strategies and a staggered approach for pure equity strategies.
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