Gift Nifty indicates a gap-up opening of about 275 points amid a global recovery boom. Thanks to the Iran-US deal and the opening of the Straits of Hormuz on Friday, which cooled oil prices, analysts expect risk-on trade to reboot across asset classes. India, which has underperformed over the last few years, is set for a strong recovery and will play catch-up, analysts said.
RBI measures expected to attract foreign flows
With recent RBI measures, foreign portfolio investments are likely to return, experts believe.
According to Ajit Mishra, SVP, Research, Religare Broking Ltd, investor confidence improved on optimism surrounding a potential U.S.–Iran peace deal, which raised hopes of easing geopolitical tensions and stabilising energy markets. The RBI further bolstered sentiment by introducing forex swap facilities for eligible external commercial borrowings (ECBs) and fresh FCNR(B) deposits, providing an additional boost to liquidity and foreign currency inflows.
Gift Nifty at 23,980 signals that Nifty may see a gain of about 275 points and may look to breach 24,000 during the day.
“Overall, market sentiment has turned decisively positive following the reported U.S.–Iran agreement and the sharp decline in crude oil prices. The development represents a major positive catalyst for both global and domestic markets and has the potential to trigger a broad-based relief rally across sectors. However, investors will continue to monitor the formal signing of the agreement and the reopening of the Strait of Hormuz for confirmation that the de-escalation process remains on track,” said Ponmudi R, CEO of Enrich Money. Additionally, while Foreign Institutional Investor (FII) selling has moderated in recent sessions, institutional flows remain an important factor to watch, as sustained foreign participation will be crucial to supporting a stronger, more durable market rally, he added.
Asian markets rally as risk appetite returns
Asian stocks opened sharply higher. Japan’s Nikkei and Korea’s Kospi are up around 5 per cent in early deals on Monday.
FCNR (B) scheme contours are taking shape, and market expectations are building toward $50 billion in inflows over the next 4M. “This has multiple positives – we think it reverses the currency weakness, as the expected BoP deficit of 475 billion could get wiped out with the help of ECB inflows and FPI gilt purchases. Moreover, domestic liquidity gets a boost, which helps mid-tier banks like IDFC, IIB, and RBL, along with NBFCs. A large part of the flows should be cornered by big banks – SBI, BOB, HDFC, ICICI, Axis, and KMB. However, the direct earnings impact for these banks would be minuscule,” said Emkay Global Research.
CPI inflation data remains a key factor for RBI policy outlook
Meanwhile, CPI inflation data came higher.
Rahul Agrawal, Principal Economist, ICRA Ltd, on CPI data, “While the CPI expectedly hardened in May 2026 vis-à-vis the 3.5% seen in April 2026, it printed at a slightly lower-than-expected 3.9%, as against ICRA’s projection of 4.1% for the month. The uptick was entirely driven by the food and beverages, transport, restaurants, and personal care divisions, with the latter three reflecting the impact of the month’s hikes in petrol and diesel prices, commercial LPG cylinder prices, and customs duty on gold and silver.
ICRA expects the MPC to remain data- and development-dependent amid sizeable risks to the growth-inflation outlook. While we believe that the next move on rates is likely to be a hike, its timing would depend on how geopolitical and macro developments, including the severity of the El Niño, transmit to a generalisation of inflationary pressures; the October and December 2026 policy meetings could be live for potential rate hike(s), after there is some clarity on the monsoon impact.”