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 India's benchmark indexes are set to open at fresh record highs on Tuesday, after scaling new peaks in the previous session on strong macroeconomic data, elevated bets of a U.S. rate cut in March and the ruling Bharatiya Janata Party's win in key state elections.

India's GIFT Nifty was down 0.24% from its overnight close at 20,811 as of 8:04 a.m. IST. However, this is still above the Nifty 50's Monday close of 20,686.80.

Both the Nifty 50 and the BSE Sensex logged their best session in 14 months and settled in overbought zones on Monday.

Wall Street equities retreated overnight after the recent rally, ahead of key U.S. labour market data due on Wednesday and Friday that could influence the U.S. Federal Reserve's rate policy. Asian markets opened lower. [MKTS/GLOB]

Softening economic data and recent comments from Fed officials including Chair Jerome Powell have raised market expectations of a 25 basis-point rate cut in March 2024, spurring a fall in U.S. Treasury yields and a global stock market rally.

Domestic macroeconomic data, including strong quarterly growth and monthly factory activity data, also aided risk-on sentiment in Indian equities.

Foreign portfolio investors (FPIs) bought Indian shares worth 20.73 billion rupees ($248.56 million) on a net basis on Monday. Domestic institutional investors (DIIs) added shares worth 47.97 billion rupees.

"We believe large-caps will outperform small- and mid-caps in the near-term, with laggards like banking stocks and Reliance Industries to lead the way," said Jaykrishna Gandhi, head of business development, institutional equities at Emkay Global Financial Services.

Index heavyweights Reliance Industries, ICICI Bank, HDFC Bank gained between 1% and 5%, while Larsen and Toubro added nearly 4%, on Monday.

Small- and mid-caps have jumped 48.36% and 39.38%, respectively, in 2023 so far, compared to the 14.26% rise in the Nifty 50, aided by strong retail inflows.

STOCKS TO WATCH:

** HCLTech: Company's unit enters into a deal with its joint venture partner, State Street, to sell 49% stake in the JV to State Street for $170 million plus net book value.

** Mahindra and Mahindra Financial Services: Non-bank lender's estimated overall disbursement in November rises 16% year-on-year, at nearly 53 billion rupees. Collection efficiency at 94%.

** Honasa Consumer: Fireside Ventures is going to sell 6.1 million shares of the company in a block deal on Dec. 5, according to media reports.** MOIL: State-owned manganese miner posts 16% year-on-year rise in manganese ore production in November.

($1 = 83.4000 Indian rupees)