GIFT Nifty Signals Potential Rally as Geopolitical Tensions Surge Amid Global Market Uncertainty

GIFT Nifty Signals Potential Rally as Geopolitical Tensions Surge Amid Global Market Uncertainty​

Indian equity markets are poised for a firm start on June 11, tracking positive signs from the GIFT Nifty index, even as global markets grapple with renewed geopolitical risks and significant uncertainty. The domestic benchmark indices registered little change at the close of trading on June 10 after broad-based selling pressure across several sectors persisted.

Global Markets React to US-Iran Tensions​

The international financial landscape saw a volatile day marked by sharp declines in major US stock indexes amid escalating tensions between Washington and Tehran. Asia saw stocks fall following fresh strikes launched by US forces against Iran, reviving geopolitical concerns already weighing heavily on richly valued technology shares globally.

In the United States, the Dow Jones Industrial Average slipped 1.87%, shedding 953.33 points to close at 49,918.78. The S&P 500 lost 1.62% (119.66 points) settling at 7,266.99, while the Nasdaq Composite registered a more significant drop of 1.98%, closing at 25,169.50.

Commodity and Currency Performance Review​

Oil prices climbed by over $2 a barrel on Thursday, reacting to Iran declaring the critical Strait of Hormuz energy chokepoint closed after additional strikes were launched by the US against Iran. In contrast, gold futures fell for the third consecutive day following the fresh attacks, which threatened to extend the war and fuel global inflation concerns.

The Dollar Index showed strength (Up) as it erased prior losses after the core gauge for May US consumer price increases was reported slightly softer than anticipated. Treasuries also maintained stability; both the 10-year and 2-year Treasury yields held steady at 4.55% and 4.13%, respectively.

Currency Markets Navigate Mixed Trends​

Asian currencies traded a mixed session on Thursday, although some localized strengths were notable. The Indonesian Rupiah was the top performer, appreciating 0.64 percent against the US dollar. The Thai Baht and Philippine Peso also registered gains, moving up 0.09 percent and 0.06 percent, respectively, while the Japanese Yen managed a marginal gain of 0.01 percent.

Conversely, the South Korean Won was the worst performer in Asian currencies, declining 0.35 percent against the greenback. The Malaysian Ringgit eased 0.12 percent, and the Taiwan Dollar and Chinese Renminbi also saw minor declines of 0.07 percent and 0.02 percent, respectively.

Indian Market Status and Fund Flows​

On June 10, both Asian equities fell amid geopolitical risk, while the domestic picture showed resilience in certain defensive sectors like FMCG and private banks. The Sensex closed marginally up at 73,983.18, gaining 64.42 points or 0.09 percent. Meanwhile, Nifty finished slightly down at 23,214.95, marking a loss of 27.15 points or 0.12 percent.

Domestic institutional investors (DIIs) provided crucial support to the domestic market, registering net purchases worth Rs 3,123 crore. This inflow stood in stark contrast to foreign fund flows, as Foreign Institutional Investors (FIIs) continued their selling streak, offloading equities worth Rs 2,124 crore on June 10.