Indian stock markets closed at record highs in Monday's trading session, driven by gains in IT, FMCG, and banking sectors. Today's market is expected to open on a flat to positive note, supported by foreign fund inflows. NSE data shows that Foreign Institutional Investors (FIIs) made net purchases worth Rs 1,735.46 crore. Market sentiment is likely to receive a boost as S&P Global Ratings projected an improvement in the financial profiles of Indian companies, citing reduced leverage and broad-based earnings growth, particularly outside the infrastructure sector. Additionally, S&P Global Market Intelligence maintained a positive outlook on India's economy, despite a slight dip in first-quarter growth to 6.7% from 7.8% in the previous quarter. India's GDP growth forecast for FY25 remains at 6.8%.

Traders are also paying attention to comments from Chief Economic Advisor V Anantha Nageswaran, who emphasized India’s strong positioning for global economic growth. However, he cautioned against the risks of financial market overreach as the nation progresses toward becoming a developed economy by 2047. Banking stocks could come into focus ahead of the Nifty Financial Services index's weekly expiry, while coal sector stocks may see action as India's coal production rose by 6.48% to 384.08 million tonnes during the first five months of this fiscal year.

Agriculture stocks will be in the spotlight after the government's approval of seven major agricultural schemes totaling around Rs 14,000 crore, including a Rs 2,817 crore Digital Agriculture Mission and a Rs 3,979 crore crop science initiative. Auto stocks might react to ICRA's report predicting up to 3% growth in commercial vehicle volumes this fiscal year, countering earlier projections of a decline. Additionally, a report indicated that electric vehicle sales grew by 22.8% year-on-year, with 156,199 units sold in August.

On the IPO front, shares of Premier Energies, Jay Bee Laminations, Vdeal System, and Indian Phosphate are set to debut on the exchanges today under the SME category.

Globally, the US markets were closed on Monday due to Labor Day, while Asian markets showed mixed trends on Tuesday as investors assessed South Korea's inflation figures, which hit their lowest year-on-year level since March 2021.

In domestic markets, equity indices touched record highs on Monday, driven by foreign fund inflows and positive trends in US markets. FIIs bought equities worth Rs 5,318.14 crore on Friday. The markets remained positive throughout the day, supported by India's rising foreign exchange reserves, which jumped by $7.023 billion to a new high of $681.688 billion. Further, Defence Minister Rajnath Singh highlighted India's transformation from the "Fragile Five" to the "Fabulous Five" since 2014, with the economy now being one of the fastest-growing globally. Government efforts to improve the ease of doing business also bolstered market sentiment.

However, gains were limited as India's manufacturing sector growth slowed to a three-month low in August, according to a private sector survey. The HSBC India Manufacturing PMI dropped to 57.5 from 58.1 in July. Additionally, concerns arose as a private report revised India's FY25 GDP growth estimate downwards to 6.7%, from 6.9% earlier, citing weaker second-quarter performance. Still, markets managed to close in the green, supported by a 10% increase in GST collections for August, totaling Rs 1.75 lakh crore.

At the close, the BSE Sensex gained 194.07 points (0.24%) to 82,559.84, while the CNX Nifty rose by 42.80 points (0.17%) to 25,278.70.