Indian benchmark indices are likely to begin Tuesday's trading session on a weak note, with GIFT Nifty trading around 24,141 in early trade, indicating a softer opening for domestic equities.

The cautious outlook follows a weak close in the previous session, where the Sensex declined 442.93 points, or 0.57 percent, to settle at 77,708.52, while the Nifty 50 fell 95.80 points, or 0.39 percent, to close at 24,238.50. Selling pressure was primarily driven by private sector banking stocks after their June-quarter earnings, while persistent geopolitical tensions in the Middle East continued to dampen global risk appetite.

Across Asia, equity markets rebounded after three consecutive sessions of losses as pressure on semiconductor stocks eased ahead of key earnings announcements from major global technology companies. However, investor sentiment remained cautious amid ongoing geopolitical developments.

In the United States, Wall Street ended lower overnight. The Dow Jones Industrial Average fell 0.59 percent, the S&P 500 declined 0.19 percent, and the Nasdaq Composite slipped marginally as investors monitored developments in the Middle East while awaiting earnings from large technology companies.

Currency markets remained relatively stable. The US Dollar Index hovered near a one-week high as markets balanced concerns over potential disruptions to energy supplies with optimism surrounding possible diplomatic efforts to ease regional tensions. Meanwhile, US Treasury yields were largely unchanged, with the 10-year yield at 4.58 percent and the two-year yield at 4.20 percent.

Asian currencies traded on a mixed note against the US dollar. The Malaysian ringgit and Chinese renminbi posted modest gains, while the South Korean won, Indonesian rupiah, Taiwan dollar and Thai baht weakened.

Crude oil prices edged lower as investors assessed reports of diplomatic mediation between the United States and Iran alongside continued military exchanges and renewed threats affecting regional shipping routes. Gold prices remained steady as market participants evaluated the potential inflationary impact of higher energy prices amid the ongoing conflict.

Institutional flow data showed that Foreign Institutional Investors (FIIs) remained net sellers of Indian equities, offloading shares worth Rs 1,121 crore on July 20. Domestic Institutional Investors (DIIs), however, provided support by purchasing equities worth Rs 1,312 crore, partially offsetting foreign outflows.

Market participants are expected to closely monitor geopolitical developments, global market performance, corporate earnings and institutional investment trends for further direction during the trading session.