Domestic stock markets are likely to come under pressure on Tuesday as well on negative global cues. The constant selling by foreign portfolio investors and rising inflation rates across the globe put pressure on equities, said analysts.

SGX Nifty at 17,324 points indicates that Nifty is likely see a gap down opening of over 100 points, as Nifty futures closed 17,446.

Rising inflation

Nov’21 headline CPI inflation rose sharply to 4.91 per cent (4.5 per cent earlier) amid base reversal, even as the sequential momentum eased mildly in both food and core components.

“The inflation-led dissenting noises in the MPC may continue, but they may still choose to look through the spike in inflation in the near term, with the monetary reaction function currently hinging more on growth revival becoming sustainable. The focus of the RBI may remain on liquidity normalisation measures amid a system liquidity deluge,” said Emkay Global.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said, “Markets are consolidating on expected lines. Investors will keep an eye on various central bank meetings and take cues for fresh market direction. After the fall and recovery in the last two weeks, the market is unable to hold back at higher levels, indicating that index may remain sideways in a consolidative mode for some more time.”

Rahul Sharma, Co-Founder, Equity99, said, “We expect liquidity issue in market for coming days majorly due to number of upcoming IPOs. The current market is stock specific market and short-term traders should keep booking profit at each rising level. It is also advised to remain cautious and follow strict stop loss. Investors have every opportunity to enter with each correction.”

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