The new week is set to begin on positive note for domestic markets amid strong global cues. Gift Nifty at 24,164 signals the market is likely to open flat-to-positive. However, analysts are cautiously optimistic on Indian markets due to mixed signals emanating from Iran-US deal. Marketmen are also expecting foreign portfolio investors to return as big buyers after prolonged selling.
Indian equity markets are likely to open on a cautious note as optimism surrounding a potential U.S.–Iran peace agreement has been tempered by reports of a rocky start to the negotiations, said Ponmudi R, CEO of Enrich Money. “Concerns emerged after reports indicated that an Iranian delegation walked out of the talks following recent threats from U.S. President Donald Trump, casting doubt on the pace and durability of the proposed agreement. Nevertheless, negotiations are reportedly continuing through mediators, suggesting that diplomatic efforts remain on track despite the initial setback,” he warned.
Meanwhile, Asian stocks arevsustaining the momentum with Korea’s Kospi gaining over 2 per cent and Japan Nikkei’s over 1 per cent.
Market ends higher for second straight week
According to Dr. Ravi Singh, Chief Research Officer from Master Capital Services Ltd, Indian equity benchmarks extended their winning run for a second straight week, with the Nifty 50 climbing 1.65% to close at 24,013 and the BSE Sensex advancing 1.7% to settle at 76,803, as easing geopolitical tensions and a favourable global macro backdrop lifted investor sentiment. The broader market outperformed the headline indices, with the Nifty Midcap index up nearly 3% and the Smallcap index gaining 3.3%, reflecting renewed risk appetite among investors.
The single biggest trigger for the rally was the mitigation in the West Asia crisis, which calmed nerves around supply disruptions and brought crude oil prices down sharply by 7%, slipping below the $80 mark. Lower crude prices proved to be a major tailwind for India, given the country’s heavy reliance on energy imports, easing concerns around the current account deficit and inflation trajectory. This, in turn, supported the rupee, which strengthened nearly 1% against the dollar over the week., he said.
Adding to the positive mix, US 10-year bond yields stayed comfortably below the 4.5% threshold, keeping global risk sentiment supportive and making emerging market equities like India relatively more attractive. Flows turned a corner too, with FIIs returning as net buyers after an extended phase of selling, pumping in Rs 3,386 crore worth of equities, while DIIs maintained their consistent buying streak, infusing Rs 7,108 crore during the week.
“Overall, the confluence of cooling geopolitical risk, softer crude, a stronger rupee, contained bond yields, and improving FII participation created a constructive setup, with broader market strength suggesting healthy underlying sentiment beyond just large-caps.”
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd said “There is distinct change in the FPI action since June 15. During the week ending June 19, FPIs bought stocks on three days and sold only on two days. “It can be concluded that the relentless selling of FPIs in India is over. The principal reason for this change in FPI activity is the stability and slow appreciation in the rupee.
According to Emkay Global Research, any correction in the market is an opportunity to accumulate stocks. “The post-war rally is running into rough weather, and equities may pause due to multiple headwinds. US-Iran talks have gone off-track, with Brent back above $80/bbl; monsoons are delayed by ~ 3 weeks, with IMD forecasts looking bleak; and the tech sector crashed again after weak guidance and commentary from Accenture. In the short term, we see markets consolidating at current levels, with some risk of a sell-off if oil crosses $85/bbl. However, we would view any weakness as an entry opportunity and remain constructive on the broader market,” it said