GIFT Nifty Surge Signals Cautious Start as Global Equities Tumble Amid Geopolitical Stress

GIFT Nifty Surge Signals Cautious Start as Global Equities Tumble Amid Geopolitical Stress​

Indian Market Outlook and Technical Indicators​

Indian benchmark indices are expected to open on a cautious yet positive note, buoyed by early trading in the GIFT Nifty. The specialized derivatives indicator was showing strength, trading marginally higher around the 23,140 level ahead of the market open. This suggests that equities may find support amidst global volatility.

The Reserve Bank of India (RBI) had recently maintained its repo rate at 5.25%, retaining a 'neutral' stance on monetary policy. During the volatile session on June 5, both major indices ended in marginal losses. The Sensex closed at 74,243.34, down 116.67 points or 0.16 percent. The Nifty finished at 23,366.70, marking a decline of 49.85 points or 0.21 percent.

For the week, both indices faced pressure, with BSE Sensex and Nifty50 shedding 0.7 percent each in the trading period. The RBI also revealed that it had lowered its FY27 GDP growth forecast to 6.6% from around 6.9%, while concurrently raising its inflation forecast to approximately 5.1%.

Global Equity Markets Face Steep Selloff​

Wall Street experienced a sharp reversal on Friday, ending nine-week winning streak with significant declines across major indexes. Red-hot technology stocks suffered their largest daily decline since April 2025, fueling fears of a hawkish pivot from the U.S. Federal Reserve following a strong May jobs report.

The Dow Jones Industrial Average dropped by 1.35%, losing 695.15 points to settle at 50,866.78. The S&P 500 shed 2.64% with a decline of 200.57 points, landing at 7,383.74. Meanwhile, the Nasdaq Composite saw a substantial downturn, falling by 4.18% and losing 1,121.53 points to reach 25,709.43.

Commodities and Currencies Trade Mixed Globally​

Geopolitical tensions heavily impacted crude oil prices. Oil stocks rose more than $2 a barrel on Monday after Israel launched renewed strikes against Lebanon. These developments erode hope for the eventual cessation of the wider war and a restart to crude flows through the Strait of Hormuz.

Gold held steady, recording a loss despite Iran firing several rounds of missiles toward Israel. This missile action jeopardizes international efforts aimed at ending the Middle East conflict and continuing global market upheaval.

In currency markets, the Dollar Index was perched near a two-month high on Monday. This move came after a blowout U.S. jobs report prompted traders to ramp up bets concerning a Federal Reserve rate hike this year. Meanwhile, Asian currencies showed mixed performance across the board.

Flows and Yields Movement in Financial Markets​

US Bond yields advanced notably. The yield on 10-year Treasuries moved up two basis points to 4.55%. Separately, the yield on 2-year Treasuries rose nearly 3 basis points, hitting 4.17%.

Among Asian currencies, the Philippine Peso emerged as a standout performer, appreciating 0.208% against the US dollar. The Indonesian Rupiah and Singapore Dollar also posted solid gains of 0.072% and 0.054%, respectively. However, currency stability was challenged by the Malaysian Ringgit, which fell sharply at 0.800%. The South Korean Won declined by 0.622%, while the Chinese Renminbi slipped 0.206%.

Institutional Investor Action Highlights​

On June 5, the Foreign Institutional Investors (FIIs) net sold equities worth Rs 8,776 crore. Counterbalancing this sale, Domestic Institutional Investors (DIIs) injected funds into the market, purchasing equities amounting to Rs 9,133 crore. This differential highlights a divergence in institutional investor sentiment over the preceding session.