Negative bias seen for Sensex, Nifty at open amid austerity talk, adverse geopolitical condition

Domestic markets are likely to open on a negative note on Monday amid Prime Minister Narendra Modi’s austerity call.

The Prime Minister, while calling for economic self-reliance, asked citizens to avoid purchasing gold for a year and reduce the consumption of petrol, diesel and cooking gas. According to analysts, market participants fear that the Centre may impose some austerity measures or hike petrol prices that could have a cascading effect on the economy.

GIFT Nifty at 24,090 indicates a gap-down opening of about 200 points.

Ponmudi R, CEO of Enrich Money, said fresh concerns emerged after Donald Trump reportedly dismissed Iran’s response to the latest US peace proposal as “totally unacceptable”, dampening hopes of an immediate diplomatic breakthrough. The development has once again brought the Strait of Hormuz and broader risks of supply disruption in global energy markets back into focus.

Overall, market sentiment remains highly news-driven and volatile, with geopolitical developments, crude oil trends and institutional flow dynamics likely to dictate the near-term trajectory, he added.

SBI Securities, meanwhile, expects FY27 real GDP growth at 6.6 per cent.

Despite global headwinds, the Indian economy has maintained strong growth momentum. High-frequency activity data indicates resilient economic activity, with a minor decline in Q4. Rural consumption remains strong, driven by positive signals from farm and non-farm activity. Supported by fiscal stimulus, urban consumption shows a consistent uptick since the last festive season. “Overall, we expect Q4FY26 real GDP growth of closer to 7.2% and nowcasted full year 2026-27 GDP growth rate of 6.6%. FY26 GDP growth is likely to be at 7.5%,” it added in a note.

Global stocks were mixed, with many of them down marginally in early deals except Korea’s Kospi that jumped over 4.5 per cent in early deals on Monday.

From a valuation perspective, large-caps are attractive versus Small and Midcap (SMID) indices, said Motilal Oswal Financial Research. According to the domestic brokerage, the Nifty-50 is trading at 19.1x forward earnings, roughly 9% below its long-period average. SMID indices continue to trade at a premium, suggesting a more stretched risk-reward profile in those segments.

“In the near term, the primary headwinds for Indian equities remain high commodity prices — specifically crude oil. If crude remains above $100, it will squeeze corporate margins. India’s market performance remains highly linked to earnings and global flows,” it cautioned.

Published on May 11, 2026