GIFT Nifty slips 40 points; Here's today's trading setup

Stock markets ended last week on a downswing due to worries about overvalued stocks, causing a broader market sell-off. This week investors will closely watch the outcome of the US Federal Reserve meeting on 20 March. Before the market opens on Monday, Gifty Nifty indicated a weak opening for the Monday session.

Looking ahead, experts predict that market declines will continue gradually, as some big name stocks across different sectors show resilience. Ajit Mishra, Senior Vice President of Technical Research at Religare Broking, recommended traders concentrate on specific stocks and uphold positions on both sides of the market.

Breakdown of premarket actions:

Market Outlook: GIFT Nifty formerly known as SGX Nifty indicates a negative start as it traded lower by 44 points signaling a potential dip in Dalal Street on Monday.

Technical Analysis: Nifty's short term and near term trend appears weak, any move below 21,900 potentially leads to further weakness towards the next support level of 21,500 in Nifty.

India VIX:  Which measures market fear increased by 0.5% to close at 13.69 levels. This suggests that there is some uncertainty among investors.

US Market Performance: US stocks declined on Friday with technology related giants leading the fall as investors assessed the upcoming Federal Reserve meeting's impact on interest rates. Dow fell by 0.5%, S&P 500 dipped by 0.7% and Nasdaq dropped by 1%.

Asian Market: Asian shares remained mixed and the dollar remained steady on Monday. Investors are cautious ahead of central bank meetings particularly in Japan and are anticipating potential changes in US rate cut strategies.

Oil rises: Oil prices saw a slight increase in early Asian trading continuing gains from the previous week due to perceptions of tightening supply. Brent crude futures for May delivery climbed by 3 cents reaching $85.37 per barrel whereas the April contract for US West Texas Intermediate crude saw an uptick of 10 cents reaching $81.14.

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FII/DII action: Foreign portfolio investors were net buyers at ₹848 crore on Friday while domestic institutional investors sold shares worth ₹682 crore.

Rupee: Rupee weakened by 2 paise to close at 82.86 against the US dollar on Friday influenced by continuous foreign fund outflows and a negative trend in domestic equities.

FII data: FII's net short position decreased from ₹50,991 crore on Thursday to ₹57,390 crore on Friday

Analyst View: Looking ahead the market decline is expected to be gradual supported by the resilience of select heavyweight stocks across sectors. Traders are advised to adopt a stock-specific approach and maintain positions on both sides, according to Ajit Mishra, SVP Technical Research, Religare Broking.