India's stock benchmarks are poised to open little changed on Tuesday, after two sessions of profit-taking from levels that were close to record highs, on caution before key U.S. data.

Gift Nifty futures were trading at 25,994, as of 07:49 a.m. IST, indicating that the Nifty 50 could open near Monday's close of 25,959.5.

Both the benchmarks fell about 0.4% on Monday, bringing their two-session losses to just short of 1%. They are now trading about 1.3% below all-time highs hit in September 2024.

While the construct of the Indian markets remains positive, supported by an improving earnings outlook, investors await progress on trade talks with the U.S. to drive a fresh rally to record high levels, according to two analysts.

"Market sentiments are likely to remain cautious until we see some progress on the India-U.S. trade talks, while fluctuating foreign flows add to interim volatility," said Siddhartha Khemka, head of wealth management research at Motilal Oswal Financial Services.

Foreign portfolio investors offloaded Indian equities worth 41.72 billion rupees ($468.20 million) on Monday, while domestic institutional investors bought stocks worth 45.13 billion rupees, according to NSE's provisional data.

Depreciation in the rupee may also contribute to near-term caution in equities as worries about imported inflation, higher input costs and pressure on import-heavy sectors intensify, analysts said.

The Indian rupee strengthened on Monday, after hitting a fresh record low of 89.49 on Friday.

Other Asian markets rose 0.9%, following an uptick in Wall Street equities overnight on rising expectations of a Federal Reserve rate cut in December.

Lower U.S. rates make emerging markets such as India more attractive for foreign investors.

Investors await a key U.S. inflation reading due on Wednesday, which could influence the Fed's rate decision in December. Retail sales and producer prices data for the U.S. will also be in focus this week.

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