GIFT Nifty Signals Weak Start as Markets Brace for Volatility Amid Iran-Israel Ceasefire

GIFT Nifty Signals Weak Start as Markets Brace for Volatility Amid Iran-Israel Ceasefire​

Indian equity markets are set to face a cautious trading session despite a positive stabilization observed in global and Asian markets overnight. The early indication from GIFT Nifty suggests a subdued start for the Sensex and Nifty, with lingering concerns over escalating geopolitical tensions, high crude oil prices, and sustained foreign institutional selling weighing heavily on domestic sentiment.

Market Indicators Point to Cautious Open​

GIFT Nifty was trading at 23,133 in early trade, marking a marginal decline of 45 points or 0.19 percent. This suggests that the Nifty 50 could open below Monday's close of 23,123. The subdued outlook comes after Indian equities extended their losing streak for a second consecutive session on Monday, as the Sensex fell by 719 points and Nifty shed 244 points amid global instability.

Global Markets React to Ceasefire and Stability​

Global markets demonstrated signs of recovery following Monday's sharp selloff. Asian equities rebounded when investors responded positively to a temporary halt in hostilities between Israel and Iran, allowing them to re-engage with semiconductor stocks. MSCI's Asia-Pacific index outside Japan rose 0.9 percent, while South Korea's KOSPI climbed 3 percent from Monday's significant drop.

Wall Street also ended the session largely higher, led by technology shares. The Nasdaq rose 0.86 percent and the S&P 500 gained 0.3 percent as buyers returned to semiconductor stocks after Friday's correction, although the Dow Jones slipped 0.16 percent. Markets found some comfort following an announcement from U.S. President Donald Trump regarding a temporary halt in attacks between Iran and Israel.

Oil Price Moderation Amid Geopolitical Tensions​

Crude oil prices moderated slightly after the pause in military operations. Brent crude was trading around $94 per barrel, while WTI crude hovered near $91 per barrel. Oil had surged by as much as 5 percent on Monday before retreating following Iran's declaration of ending military actions against Israel. This moderation comes as concerns over inflation and import costs remain acutely present in the market landscape.

Domestic Flows: FII Selling Capped Upside Potential​

The buoyancy of domestic equities remains balanced by persistent foreign institutional selling (FII). Foreign investors were net sellers on June 8, offloading shares worth Rs 5,555 crore. However, domestic institutional investors provided a vital cushion, purchasing equities valued at Rs 5,165 crore to help absorb the majority of the outflowing foreign pressure.

Technical Outlook for Nifty and Bank Nifty​

Analyst views suggest that Indian markets are likely to exhibit volatility with a cautious bias as the ceasefire reduces immediate escalation risks but offers no clarity on the broader diplomatic process involving Iran and the U.S.

For the Nifty, resistance is currently anticipated in the 23,250-23,300 zone, while the 23,000 level stands firm as a critical support area. A sustained breach above this resistance could potentially drive the index toward the 23,450-23,550 range, whereas a fall below 23,000 could trigger further downside towards 22,800. For Bank Nifty, immediate support is situated between 54,000 and 53,800, with resistance seen in the 54,400-54,500 zone.