Indian equity markets are poised for a weak start on Monday, with Gift Nifty indicating a sharp gap-down opening after the Reserve Bank of India (RBI) revised its inflation outlook upward and lowered growth projections while keeping the repo rate unchanged in its latest monetary policy review.
Gift Nifty was trading around 23,096, nearly 356 points below the previous close of Nifty futures, signaling significant selling pressure at the opening bell.
On Friday, domestic benchmark indices ended a volatile session in the red after investors reacted to the RBI's updated macroeconomic forecasts. While the central bank maintained the policy repo rate, its decision to raise inflation estimates and trim growth projections sparked concerns over the economic outlook and corporate earnings trajectory.
Despite the positive opening cues, concerns persist over sustained foreign investor outflows. Market experts highlighted that Foreign Institutional Investors (FIIs) continue to remain net sellers in Indian equities, a trend that could weigh on market sentiment in the near term.
Asian markets traded lower during early trade, with Hong Kong's Hang Seng Index declining 1.24% to 24,653.15, while China's Shanghai Composite fell 0.97% to 3,988.51, reflecting cautious investor sentiment across the region.
The cautious sentiment was further reflected in global markets, with investors assessing the implications of sticky inflation, interest rate expectations and slowing growth trends.
Market participants will closely track foreign institutional investor (FII) flows, global market cues and economic data releases for further direction. Continued FII selling remains a key concern for Indian equities in the near term.
