The Indian stock market opened with slight gains on Tuesday, defying the previous session's significant decline caused by profit-taking and instability in global markets.

The indices were also somewhat supported today by a decrease in domestic retail inflation.

In January, India's annual retail inflation dropped to 5.10 per cent from a four-month peak of 5.69 per cent in December. Although this is within the RBI's comfort range of 2-6 per cent, it exceeds the ideal 4 per cent scenario.

At 9:41 am, the Sensex stood at 71,192.75 points, marking a gain of 120.26 points or 0.17 per cent. Meanwhile, the Nifty reached 21,631.15 points, up by 15.10 points or 0.070 per cent. Among the Nifty 50 companies, 25 showed advancement while the remaining 25 declined when the report was filed.

Foreign portfolio investors persist in selling Indian stocks, which, alongside elevated stock valuations, are causing concern among investors.

"An important ongoing trend in the market is the weakness in the broader market with sharp cuts in many mid and small caps. Many such stocks driven up by speculative buying without consideration for the fundamentals are correcting," VK Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, stated.

"This trend is likely to continue since many such stocks are excessively valued," Vijayakumar said.

"The explosive growth in the number of demat accounts and the newbies chasing mid and small caps influenced by recency bias have contributed to this froth in the broader market. A correction in this segment is inevitable and desirable. Correction will give opportunities to buy fairly valued stocks in this segment like PSU Banks," he added.

Foreign portfolio investors have been actively offloading Indian stocks and have become net sellers in the Indian equity market in 2024, after rushing to acquire domestic stocks in November and December.

Following the sale of stocks totaling Rs 25,744 crore in January, they have currently sold Rs 2,744 crore in February.