BENGALURU: India’s benchmark index Nifty 50 is set to open higher on Tuesday, after meagre gains in the previous session as another record high led to a bout of selling pressure.

India’s GIFT Nifty was trading at 21,856.50 as of 8:14 a.m. IST, suggesting the NSE Nifty 50 is set to open above its Monday close of 21,741.90. More broadly, Asian markets edged lower, on mixed economic data from China.

While official data showed manufacturing activity shrunk, a private-sector survey showed expansion. Wall Street was closed on Monday for the New Year holiday.

Domestically, the test is if Nifty and BSE Sensex can sustain their upward moves after they succumbed to selling pressure on Monday following yet another record high.

“The market has started to exhibit high volatility around the new highs, which signal chances of a round of downward correction from the highs,” said Nagaraj Shetti, senior technical analyst at HDFC Securities.

Indian blue-chips stocks end with small gains on first day of 2024

The Nifty gained about 20% in 2023, powered by faster-than-expected economic growth, steady retail buying and return of foreign purchases on elevated bets of a US rate cut. But most of that has been priced into stocks.

“In an entirely fundamental market, returns in 2024 will likely be modest and negative for many stocks,” said analysts led by Sanjeev Prasad of Kotak Institutional Equities.

Foreign institutional investors (FIIs) sold Indian shares worth 8.56 billion rupees (about $103 million), on a net basis, on Monday.

Domestic institutional investors (DIIs) bought a net 4.10 billion rupees worth of stocks, exchange data showed.