What to Expect from Markets on Monday: Top Cues to Watch

Market momentum remains fragile even after a strong recovery, and traders are now shifting their focus to the next big trigger. With global signals improving but risks still present, Monday’s session could set the tone for the coming week. The real question is not just whether the market opens higher, but whether it can sustain those gains. From global developments to institutional activity, several moving parts are likely to influence how the market behaves in early trade.

After a strong and volatile week, investors are now looking ahead to Monday’s trading session. The direction of BSE Sensex and Nifty 50 will depend on a mix of global signals, domestic trends, and investor activity.

Early indicators suggest a mildly positive start, but the overall movement may remain cautious. Markets are currently balancing optimism with underlying risks.

Let’s break down the key factors that will shape Monday’s market direction.

Cautious Positive Start Expected

Signals from Gift Nifty indicate that markets may open slightly higher. This suggests a positive tone at the start of the session.

However, gains may remain limited.

Why? Because recent rallies have already priced in some optimism. After a strong move, markets often slow down or consolidate before the next big trend.

Here’s what to expect at the opening:

• Mild gap-up opening likely
• Limited upside in early trade
• Stock-specific action dominating

This means traders may see movement in individual stocks rather than a strong index rally.

Global Markets Providing Support

Global cues remain supportive for now, which is a positive sign.

In the US, major indices like Dow Jones Industrial Average, NASDAQ, and S&P 500 closed higher. This reflects improving sentiment globally.

European markets also ended in the green:

• FTSE 100
• DAX
• CAC 40

When global markets move higher together, it creates a supportive environment for Indian equities.

However, global sentiment can change quickly. Investors should stay alert to any overnight developments.

Volatility Cooling Down

One of the most important indicators right now is volatility.

India VIX has dropped sharply by nearly 8 percent. This is a strong signal that fear in the market is reducing.

Lower volatility usually means:

• More stable price movements
• Better trading conditions
• Reduced panic selling

But it also means that big swings may be limited in the short term.

So while the market may remain stable, sharp rallies may not happen immediately unless a strong trigger appears.

FII Selling vs DII Buying Trend

Institutional activity is another key factor to watch.

Foreign Institutional Investors have been consistent sellers in recent sessions. This creates pressure on the market.

On the other hand, Domestic Institutional Investors are buying steadily. This provides support and prevents major declines.

This push and pull creates a balanced market:

• FIIs selling limits upside
• DIIs buying supports downside

Until one side becomes dominant, markets may remain range-bound.

Key News and Sectoral Triggers

Several important developments could influence Monday’s session.

Energy supply remains a concern as India allows certain Iran-linked ships to dock. This shows pressure on gas availability and could impact energy-related stocks.

IT stocks are under pressure after weak signals from Tata Consultancy Services and growing competition in AI. This could continue to weigh on the IT sector.

Inflation expectations are also rising slightly. Higher fuel costs are pushing prices up, although falling gold prices are providing some balance.

These mixed signals suggest that sector-wise movement will be important.

What Should Investors Do Now

With markets expected to open mildly positive but remain cautious, a balanced approach is best.

Here’s a simple strategy:

• Avoid aggressive buying at the opening
• Focus on strong sectors showing momentum
• Track global news closely
• Prefer gradual investment over lump sum

Short-term traders should watch key levels, while long-term investors should focus on quality stocks.