Markets likely to make negative start on Tuesday

26 May 2026 Evaluate

Indian equity markets are likely to make a negative start on Tuesday, tracking mixed cues from Asian markets, as investors remain cautious over the US-Iran peace talks. However, the downside may be limited as Foreign Institutional Investors (FIIs) turned net buyers on May 25, 2026, with a net inflow of Rs 821.75 crore.

Some of the key factors to be watched:

EAM Jaishankar holds talks with Japanese counterpart Motegi: External Affairs Minister S Jaishankar and his Japanese counterpart Motegi Toshimitsu held wide-ranging talks focusing on economic fallout of the West Asia crisis in view of disruptions in energy supply chains.

West Asia crisis not a diplomatic issue, will lead to higher fuel costs for common man: Hours after the fourth hike in pump prices for petrol and diesel in 11 days, Union Finance Minister Nirmala Sitharaman said that the crisis in West Asia is not just a geopolitical issue, but it will lead to higher fuel costs for the common people.

RBI unlikely to hike rates soon despite inflation risk, rate action only in December if needed: A rating agency ICRA has said that the Reserve Bank of India (RBI) is unlikely to rush into monetary tightening despite mounting inflation risks from higher fuel prices and monsoon uncertainty.

Prolonged conflict to shave 200 bps off corporate profitability in FY27: Crisil Ratings said prolonged supply-chain disruptions due to the protracted conflict in West Asia could shave off corporate operating profitability by 200 basis points (bps) in the current fiscal year, but India Inc will remain resilient on the back of strong balance sheets.

India, South Korea begin next round of negotiations on upgrading trade pact: The report said India and South Korea began the next round of negotiations to upgrade the Comprehensive Economic Partnership Agreement (CEPA), which was implemented in January 2010.

Global front: The US markets were closed on Monday on account of the Memorial Day. Asian markets are trading mixed on Tuesday, after President Donald Trump said negotiations with Iran were proceeding nicely, though he warned that the U.S. could resume attacks if the talks failed.

Back home, Indian equity benchmarks ended on strong note on Monday, driven by a sharp correction in crude oil prices and a rally in global markets amid improving sentiment surrounding the US-Iran negotiations. An appreciating rupee against the US dollar and intense buying in Banking, Telecom and Auto stocks also bolstered sentiment. Finally, the BSE Sensex rose 1073.61 points or 1.42% to 76,488.96 and the CNX Nifty was up by 312.40 points or 1.32% to 24,031.70.

Some of the important factors in trade:

India’s exports record healthy growth during first three weeks of May: Commerce and Industry Minister Piyush Goyal has said that India’s exports have recorded healthy growth during the first three weeks of May.

India, US looking at firming up trade deal soon: US Secretary of State Marco Rubio has said that India and the US are poised to soon firm up the much-awaited trade agreement that will be both beneficial and sustainable and will advance the mutual interests of both nations.

India in better position to manage retail inflation, RBI must hold rates: ASSOCHAM has said that India is better placed to manage retail inflation among the top 10 economies, amidst the ongoing disruptions caused by the West Asia conflict. It further suggested the RBI to maintain the status quo on the repo rate.

Markets likely to make negative start on Tuesday

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