Indian equity market is expected to open higher on Tuesday, extending gains for the second day, tracking firm cues from Asian peers, which gained on hopes for a positive start to U.S.-China relations after Donald Trump was sworn in as the 47th president overnight. The positive trend at Gift Nifty also signals a gap-up start for the Indian stock market, with Nifty futures rising 144 points, or 0.62%, to 23,381.

In the early trade, markets in Asia-Pacific region were trading higher, led by stock exchanges in Japan and Hong Kong.  Japan’s Nikkei 225 rallied 1.16%, Hong Kong’s Hang Seng surged 1.7%, while China’s Shanghai Composite was trading higher with marginal gains. Among others, Australia’s ASX 200 climbed 0.55%, while South Korea’s KOSPI dropped 0.15%.

Meanwhile, the U.S. stock markets were closed on Donald Trump’s inauguration day, i.e January 20, in observance of Martin Luther King Jr. Day. On Friday, Wall Street ended higher amid optimism about the growth of the American economy under Trump's second term.

Economists and market experts have forecasted positive, albeit volatile outlook for the Indian share market under a second Trump administration amid uncertainties regarding potential tariffs that could add inflationary pressures to developing economies like ours. The market will keep a close eye on Trump’s trade policies which will be key trigger for local currency movement and foreign fund flows.

“Trump’s assurances of a positive dialogue with China added to global optimism. Export-oriented sectors such as IT, pharma, speciality chemicals and textiles will remain in focus with Trump’s trade policy decisions following the start of his Presidential term,” says Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Market ends higher on Monday

The 30-share Sensex and Nifty50 started the week on a positive note, with benchmark indices rising up to 0.6% amid gains in banks, metals, and financial stocks. The Sensex surged 454 points, or 0.59%, to settle at 77,073, and the Nifty settled at 23,345, up 141 points, or 0.61%. The broader markets witnessed strong buying, with Nifty Midcap100 ended and Nifty Smallcap100 gaining 0.9% and 1.09%, respectively.

The top gainers on the Nifty50 pack were Kotak Mahindra Bank, Wipro, Bajaj Finance, Bajaj Finserv, NTPC, SBI, Adani Enterprises, and Bharat Electronics. On the other hand, SBI Life, Trent, Shriram Finance and Adani Ports were among top laggards, with 21 out of 50 constituent ending in negative terrain.

During the session, domestic institutional investors (DIIs) bought shares worth ₹4,321 crore, while foreign institutional investors (FIIs) sold equities worth ₹4,336 crore, provisional data from NSE showed.

Technical outlook

After a phase of consolidation and base formation around the 23,150–23,200 zone, Nifty appears to be gathering momentum for an upward move, says Om Mehra, Technical Analyst, SAMCO Securities. “Nifty is approaching the resistance zone at 23,400. A breakout above this level could open the door for an extended rally toward 23,550–23,570 levels, further confirming bullish momentum,” he says.

Q3 earnings

Some of the key results to watch out today will be Tata Technologies, Dalmia Bharat, Aditya Birla Real Estate, ICICI Prudential Life Insurance Company, Cyient DLM, India Cements, IndiaMART InterMESH, Indoco Remedies, Jana Small Finance Bank, KEI Industries, PNB Housing Finance, South Indian Bank, and UCO Bank amongst others. 

Stocks to watch

Cipla: The drug manufacturer’s subsidiary, Medispray Laboratories, has received one observation in Form 483 from the United States Food and Drug Administration (USFDA) for its Goa plant. The USFDA conducted inspection of the manufacturing facility from January 14 to 20.

Multi Commodity Exchange of India (MCX): The company posted profit of ₹160 crore versus loss of ₹5.4 crore in the year ago period, while revenue jumped 57.4% to ₹301.4 crore.

Bank of Baroda: The PSU bank has decided to transfer its depository business (DEMAT) to its wholly owned subsidiary, BOB Capital Markets, for ₹1.53 crore.

Torrent Power: The company’s subsidiary, Torrent Green Energy (TGEPL), has incorporated its subsidiary, Torrent Urja 37.

Landmark Cars: The auto retailer has received a letter of intent from JSW MG Motor India to open new MG Select dealerships in Ahmedabad and Kolkata.

Tata Consultancy Services (TCS): The company has started a new delivery center in Toulouse, France, to drive AI-powered transformation for the aerospace and defence industries.

Vedanta: Fitch has upgraded its parent Vedanta Resources' senior unsecured rating to 'B+' from 'B-' and has upgraded the outlook to stable.

Indian Overseas Bank: The PSU bank plans to dilute government’s 2.5% stake in the lender before the end of this fiscal to raise ₹2,000 crore. The government currently holds 96.38% shares in the bank.

Dixon Technologies: The company has posted a 124% rise in its consolidated net profit at ₹217 crore in Q3 FY25 as compared to ₹97 crore reported in the year ago period. The revenue from operations more than doubled to ₹10,461 crore from Rs 4,821 crore in the corresponding quarter of the previous financial year.