GIFT Nifty Signals Major Rebound as Markets Brace for Rally Despite Iran Tensions

GIFT Nifty Signals Major Rebound as Markets Brace for Rally Despite Iran Tensions​

Indian equities are set for a positive opening on Thursday, buoyed by renewed investor interest in semiconductor stocks and a recovering sentiment from Asian markets. This anticipated rally follows the steep decline experienced in both benchmark indices on Wednesday. While international geopolitical tensions persist, global financial indicators suggest a potential shift back toward bullish momentum.

Market Rebound After Steep Sell-Off​

The pre-market indicator, GIFT Nifty, showed strong support for a rise, trading at 23,981.5 around 8:00 am. This level represents a gain of 103.5 points or 0.43 percent. The positive outlook contrasts sharply with the performance on Wednesday, when Indian markets faced significant declines amid fresh geopolitical friction and escalating crude oil prices.

On Wednesday, the Sensex tumbled by 2.15 percent, losing 1,677.12 points to settle at 76,503.60. Simultaneously, the Nifty dropped 2.12 percent, shedding 516.65 points and closing at 23,882.05. The downturn occurred against a backdrop of renewed US-Iran hostilities.

Asian Stocks Rally on Chip Optimism​

Asian equities recovered notably on Thursday, with investors returning focus to the semiconductor sector. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent. Japan experienced a strong gain, with its Nikkei climbing 2.3 percent and ending a three-day streak of losses.

The technology segment showed particular strength. South Korea’s Kospi surged by 3.8 percent, driven by Samsung Electronics gaining 3.6 percent and SK Hynix surging a robust 7.5 percent following the recent correction among chipmakers. European stock futures also advanced by approximately 0.9 percent during Asian trading hours.

Geopolitical Tensions and Oil Price Surge​

Crude oil prices remained elevated, marking their third consecutive session of rising. Renewed US military strikes on Iran, coupled with ongoing supply risks concerning shipping through the Strait of Hormuz, kept market focus on potential disruptions. Brent crude traded above $79 a barrel, extending its weekly gain to about 9 percent.

US West Texas Intermediate crude also hovered near $75 a barrel. Although President Trump later stated that he did not anticipate a full-scale war, investors continued pricing in significant geopolitical risk premiums following the latest escalation. This turbulence continued to weigh on market sentiment.

Institutional Flows and Expert Warnings​

Foreign institutional investors (FIIs) maintained their buying streak for the fourth consecutive session on July 8th. They invested Rs 1,962 crore into Indian equities, offsetting the sharp decline seen earlier in the week. Domestic institutional investors (DIIs) also turned net buyers, injecting Rs 790 crore to cushion some of the selling pressure.

Ponmudi R, CEO of Enrich Money, noted that the renewed US military strikes on Iran have heightened concerns regarding regional stability and potential disruptions to global energy supplies. He added that continued FII buying amidst this uncertain global backdrop is an encouraging indicator for market sentiment.

Technical Outlook and Key Support Levels​

The near-term technical structure of Nifty, however, has seen some weakness after slipping below crucial support levels. The 24,000 zone currently functions as the immediate resistance target, and a decisive move above this level could trigger a recovery into the 24,200 to 24,400 range.

On the defensive side, 23,800 remains the critical immediate support for the index. A sustained break below this key level could accelerate selling pressure towards the 23,600 to 23,500 zone. Experts advise close monitoring of foreign inflows as sentiment remains sensitive to global stability.