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The GIFT Nifty, an early indicator of the Nifty 50's performance, traded at 24,151. The Nifty 50 settled 32.95 points, or 0.14%, lower at 24,219.05. The index recovered 36.25 points from its provisional close. The Sensex ended 170.70 points, or 0.22%, lower at 77,370.13, improving 42.03 points from its provisional close. Both benchmarks closed lower after gaining for two consecutive sessions.
The domestic market will take its opening cues from GIFT Nifty, while investors track developments in Asian equities, crude oil and U.S. markets. Nifty's F&O expiry, technology stocks, oil prices and geopolitical developments remain among the factors in focus.
Siddhartha Khemka, head of research, wealth management, at Motilal Oswal Financial Services Ltd., said domestic fundamentals and global cues could support Indian equities.
"Indian equity markets are expected to sustain their gradual upmove on the back of supportive domestic fundamentals and improving global cues," Khemka said.
He said technology stocks would remain in focus after Tata Consultancy Services Ltd. reported its June-quarter earnings.
"The Nifty IT index would be in focus after TCS reported an inline June quarter earnings while its management commentary suggested expectations of a gradual recovery in technology spending from the second quarter," Khemka said.
He said investors would also track results from other technology companies, including HCLTech, LTIMindtree, Wipro and Tata Technologies.
Khemka said defence stocks remained in focus amid strategic acquisitions and partnerships. He also pointed to the agreements signed by India and Australia across civil nuclear energy, defence, maritime security, critical minerals, cyber cooperation and trade.
"The Nifty PSU Bank index gained nearly 3%, led by Indian Bank following its strong Q1 FY27 results, while metal stocks extended gains amid a weaker U.S. dollar, which supported global commodity prices," he said.
Asian Markets Trade Mixed
Asian equities moved in different directions in early trade. South Korea's Kospi fell 2.96%, while Japan's Nikkei 225 declined 0.87%. Australia's S&P/ASX 200 rose 0.40%.
The mixed trading followed a divided session on Wall Street, where technology shares came under pressure ahead of Nvidia's earnings and a key U.S. inflation reading later this week.
U.S. equity futures showed little movement overnight. Dow Jones Industrial Average futures rose 15 points, or 0.03%, while S&P 500 futures edged 0.03% higher. Nasdaq 100 futures were broadly unchanged.
In Monday's regular session, the S&P 500 fell 0.28%, while the Nasdaq Composite declined 0.76% as semiconductor and other technology stocks fell. The Dow Jones Industrial Average rose 140.15 points, or 0.26%.
Meanwhile, U.S. Treasury yields declined after CNBC reported that the Treasury Department could use its $1 trillion General Account to support plans for increased purchases of government securities. The benchmark 10-year Treasury yield fell by more than three basis points to 4.7%.
Oil Prices in Focus
Oil prices remained under watch after Brent crude recorded a sharp decline in the previous session. Brent traded near $92 a barrel after falling more than 2% on Monday, while West Texas Intermediate was around $85 a barrel.
The U.S. has increased pressure on Iran and countries that continue to maintain economic ties with Tehran, seeking to restore energy shipments through the Strait of Hormuz.
Treasury Secretary Scott Bessent said Monday that countries would receive a defined period to wind down their links with Iran or face unilateral penalties. He described the wider effort as an "economic D-Day" campaign.
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