BENGALURU: India’s benchmark Nifty is set to open little changed on Tuesday, as a global rally fueled by hopes of US interest rate cuts showed signs of slowing down, with more Federal Reserve officials pushing back against expectations.

India’s GIFT Nifty was down 0.04% from its overnight close at 21,478 as of 8:09 a.m. IST, indicating the Nifty 50 is likely to open around its Monday close of 21,418.65.

The Nifty and Sensex fell on Monday after rallying to record highs for most of this month. So far in December, the Nifty has risen 6.38%, and is on course for its best month since July 2022.

The rise has been supported by strong domestic macroeconomic data, moderation in oil prices, sustained inflows from mutual fund investors, record fortnightly foreign purchases and improving US rate outlooks.

“Given the recent strong rally, some profit booking cannot be ruled out,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.

Asian shares steadied early on Tuesday as traders’ focus turned on Japan’s central bank and whether it might edge further away from its ultra-easy monetary policy.

Indian shares snap rally to record highs as financials weigh

Wall Street equities closed marginally higher overnight, while US Treasury yields rose as more US Federal Reserve officials pushed back against market bets on rate cuts.

Oil prices rose for a second session, as attacks by Yemen’s Iran-aligned Houthi on ships in the Red Sea disrupted maritime trade.