GIFT Nifty points to weak open on Iran-Israel flare-up
Indian equities are set for a weak start on Monday, with GIFT Nifty trading about 350 points below Nifty futures in early deals after Iran launched missiles at Israel and global markets sold off sharply.
The negative cues follow a volatile Friday session where Sensex and Nifty 50 closed lower after the Reserve Bank of India raised its inflation forecast and cut growth projections while holding the policy rate.
Market overview
| Index | 6 Jun Close | Move & % Change | Comments |
|---|---|---|---|
| Sensex | 74,243.34 | -116.67 pts (-0.16%) | Slipped in volatile trade after RBI policy and revised forecasts. |
| Nifty 50 | 23,366.70 | -49.85 pts (-0.21%) | Closed lower as investors digested RBI growth and inflation changes. |
- GIFT Nifty traded near 23,091–23,096, about 350–356 points below prior Nifty futures close.
- Pricing implies a gap-down open for Sensex and Nifty 50 on Monday.
- RBI kept the repo rate unchanged in June policy, but raised inflation forecast.
- RBI also cut GDP growth projections, weighing on domestic sentiment Friday.
- Foreign portfolio investors sold ₹8,776 crore of equities on Friday, per exchange data.
- Domestic institutional investors bought ₹9,133 crore, offsetting foreign outflows.
Key global cues for Indian markets
| Market/Asset | Movement | Notes |
|---|---|---|
| Nasdaq Composite | -4.18% | Logged largest one-day percentage loss since April 2025. |
| S&P 500 | -2.64% | Ended nine-week winning streak on tech weakness. |
| Dow Jones | -1.35% | Fell sharply as risk sentiment deteriorated. |
| Japan Nikkei 225 | -3.66% | Dropped on Middle East tensions and oil spike. |
| Japan Topix | -2.41% | Tracked broad selloff in Japanese equities. |
| South Korea Kospi | -8.4% | Crashed amid risk-off trade in Asia. |
| South Korea Kosdaq | over -7% | Smaller caps hit harder in regional selloff. |
| US crude (WTI) | +2.32% | Around $92.64 per barrel on renewed West Asia conflict. |
| Brent crude | +2.5% | Near $95.42 per barrel as supply risks rise. |
| Gold | -0.1% | Around $4,325.18 an ounce despite geopolitical stress. |
| Silver | -0.3% | Near $67.62 an ounce. |
| US dollar index | Near 2‑month high | Supported by strong US jobs data and rate expectations. |
- Iran launched missiles at Israel, the first major escalation since an April ceasefire.
- Israel carried out renewed strikes on Lebanon despite an existing truce.
- Rising crude prices raise concerns on India’s import bill and inflation trajectory.
- US nonfarm payrolls rose 172,000 in May, beating expectations of 85,000.
- Strong US jobs data pushed the dollar higher and reinforced rate hike bets.
- The euro slipped to about $1.1507, a two‑month low against the dollar.
- Sterling traded near $1.33165, a three‑week low.
- The Japanese yen hovered around 160.29 per dollar, near intervention levels.
Domestic macro and policy backdrop
- India’s GDP grew 7.8% in Q4 FY26, versus 7% a year earlier.
- Full‑year FY26 GDP growth was 7.7%, up from 7.1% in FY25.
- Growth was supported by domestic demand and government spending.
- RBI announced measures to attract foreign capital and dollar inflows.
- Government tax relief for foreign investors in government securities may aid flows.
- The Indian rupee closed at 94.94 on Friday, its best session in two months.
- India VIX fell 0.6% to 15.79, signalling lower implied volatility into the weekend.
- “Indian equity markets are expected to remain range-bound this week amid a mix of domestic and global cues” — Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Technical outlook for Nifty 50
- Analysts expect Nifty 50 to consolidate between 23,300 and 23,500 in the near term.
- A sustained move above 23,500 could open upside towards 25,700 and higher.
- A decisive break below 23,300 may trigger a sharper correction.
- GIFT Nifty discount suggests Nifty could test the lower end of this band on open.
Other key market statistics and flows
| Statistic | Value/Change | Context |
|---|---|---|
| India VIX | 15.79 (down 0.6%) | Indicates relatively contained near-term volatility expectations. |
| FPI flows (Friday) | ₹8,776 crore net sold | Reflects risk-off mood after RBI policy and global cues. |
| DII flows (Friday) | ₹9,133 crore net bought | Domestic institutions absorbed foreign selling. |
| Rupee close (Friday) | 94.94 | Best day in two months after RBI measures to attract dollar inflows. |
- Stocks in F&O ban on Monday include Amber Enterprises and Kaynes.
- Securities enter the ban list after crossing 95% of market-wide position limits.
- Asian equity futures, including Hang Seng, indicated a weaker open.
What changed for traders over the weekend
- Geopolitical risk rose after Iran’s missile attack on Israel.
- Crude oil moved above $92–95 a barrel range, raising inflation concerns.
- US tech stocks, including Nvidia, AMD, Microsoft and others, fell sharply Friday.
- Japan revised Q1 GDP to 1.8% annualised, slightly below initial 2.1% estimate.
- Without annualisation, Japan’s Q1 GDP grew 0.5%, matching preliminary data.
- Strong US jobs data and a firm dollar tightened global financial conditions.
- Combined, these factors pushed GIFT Nifty over 300 points lower versus Nifty futures.
Q: Why is GIFT Nifty trading at a steep discount to Nifty futures?
- Escalation in the Iran-Israel conflict, a sharp global equity selloff and higher crude prices are driving risk-off sentiment, leading to a gap-down indication for Indian indices via GIFT Nifty.
Q: How do higher crude prices affect Indian equities?
- India is a large crude importer, so higher oil raises input costs, widens the trade deficit and can pressure inflation, which in turn may affect rate expectations and equity valuations.
Q: What key domestic data should traders track this week?
- Investors are watching RBI’s revised inflation and growth projections, progress of the monsoon, foreign fund flows and any follow-through on the rupee after the central bank’s measures to attract dollar inflows.
Frequently Asked Questions
Why is GIFT Nifty indicating a gap-down open today?
GIFT Nifty is trading about 350 points below the previous Nifty futures close as Iran’s missile attack on Israel, a sharp selloff in global equities and a spike in crude oil prices have triggered risk-off sentiment ahead of the Indian market open.
How did Indian markets close in the last session before the weekend?
In Friday’s session, the Sensex fell 116.67 points to 74,243.34 and the Nifty 50 declined 49.85 points to 23,366.70 as investors reacted to the RBI’s unchanged repo rate but higher inflation forecast and lower growth projections.
What are the key technical levels to watch for Nifty 50 this week?
Analysts see Nifty 50 consolidating between 23,300 and 23,500 in the short term. A breakout above 23,500 could target around 25,700, while a sustained move below 23,300 may lead to a sharper correction.
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