Market set for pullback after strong two-day run

GIFT Nifty:

GIFT Nifty June 2025 futures were trading 23 points lower in early trade, suggesting a negative opening for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) bought shares worth 135.98 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,745.72 crore in the Indian equity market on 26 May 2025, provisional data showed.

According to NSDL data, FPIs have bought shares worth Rs 13410.37 crore in the secondary market during May 2025 (so far). This follows their purchase of shares worth Rs 3243.03 crore in April 2024.

Global Markets:

US Dow Jones futures jumped 342 points early Tuesday, hinting at a strong start for Wall Street after a long weekend break. The US stock market was shut on Monday for Memorial Day.

Over in Asia, stocks were mostly in the red as investors digested fresh signals on global trade. President Trump has decided to hold off on slapping 50% tariffs on EU imports, keeping markets on edge.

Japans Nikkei slipped after Bank of Japan Governor Kazuo Ueda highlighted risks from sticky inflation. He hinted that more rate hikes could be on the table if the economy picks up steam.

China, meanwhile, offered a glimmer of optimism. Industrial profits rose 3% year-on-year in April, beating Marchs 2.6% growth. For the first four months of the year, profits are up 1.4%, according to the National Bureau of Statistics.

Domestic Market:

The key equity benchmarks closed sharply higher on Monday, notching up gains for the second straight session. The rally was fueled by the Reserve Bank of India's record dividend payout, which is likely to ease fiscal stress. Investor sentiment was further lifted by news of India becoming the worlds fourth-largest economy. However, the upside was somewhat capped amid concerns over potential geopolitical tensions and trade-related risks from the US. The S&P BSE Sensex added 455.37 points or 0.56% to 82,176.45. The Nifty 50 index advanced 148 points or 0.60% to 25,001.15. In two trading sessions, the Sensex and Nifty have jumped 1.51% and 1.59%, respectively.

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