Domestic markets are likely to see a flat opening on Tuesday, amid concerns over US tariffs after Washington issued a notice that 50 per cent levies on Indian goods will take effect from Wednesday. With tomorrow being a holiday due to Ganesh Chathurthi, the market will remain lacklustre said analysts. Investors will remain in wait-and-watch mode.
With domestic triggers such as GST rationalisation and other incentives, analysts expect the domestic consumption theme will shine.
Emkay Global Research, in a note said: We remain positive on Indian equities from a 2-3 quarter perspective and see GST rationalisation as a key catalyst, rendering the tariff outcome largely moot.
“The earnings cycle is bottoming out and strong fiscal and monetary stimuli should catalyse a consumption-led macro recovery in H2-FY26. “Elevated multiples are not a major worry unless earnings surprise us on the downside from here – which we see as unlikely. Domestic flows remain robust and there are no signs of weakening – this offsets FPI and promoter selling to a large degree. There may be some choppiness in the short-term until earnings visibility emerges: we see any significant correction as an entry opportunity. We continue to be OW on Discretionary and UW on Financials and Technology,” it said.
The options market reflects the prevailing caution, with call writers tightening their grip at higher levels, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities. “The 25,000 strike witnessed aggressive call writing, with open interest swelling to 1.57 crore contracts, reinforcing it as a formidable ceiling. On the downside, the 24,900 strike carries the second-highest put open interest of 96.82 lakh contracts, acting as a near-term support base,” he said.
Interestingly, while put writers are gradually shifting to slightly higher strikes, call writers remain dominant, highlighting restrained conviction for a trending move. The Put-Call Ratio (PCR) improved from 0.61 to 0.77, indicating supply pressure still outweighs demand at higher levels, he said.
India VIX remained largely steady, inching up 0.26 per cent to 11.75. “Despite lingering global uncertainties, the contained volatility signals more consolidation than a sharp correction. The subdued VIX reflects cautious optimism, with no signs of panic among market participants,” Dhameja said.
Published on August 26, 2025
