Pre-Market Setup (May 12): GIFT Nifty jumps 460 pts as ceasefire, global cues lift sentiment; markets likely to open in green

Indian equities are poised for a strong rebound on Monday, May 12, after a tense week marked by geopolitical jitters. A decisive ceasefire between India and Pakistan over the weekend has calmed investor nerves, while global cues remain supportive. The GIFT Nifty is up over 460 points, indicating a gap-up start for the Nifty 50.

Ceasefire lifts market mood, global sentiment improves

The ceasefire agreement announced Saturday between India and Pakistan has brought much-needed relief to domestic investors. Analysts believe this will remove a major overhang on markets that caused sharp intraday swings last week. Meanwhile, positive progress in US-China trade talks has pushed Asian equities and US futures higher, setting a strong tone for risk assets globally.

GIFT NIFTY Futures

GIFT Nifty (formerly SGX Nifty) was trading 463.50 points higher at 24,553 in early trade on Monday, signalling a potential 1.9 per cent rally for Indian benchmarks at the open. If sustained, this would help Nifty reclaim crucial psychological zones and re-enter bullish territory.

Technical charts suggest that 23,800 now acts as a make-or-break level for the Nifty. A breach could drag the index toward 23,500, with strong technical confluence from the 50-day and 89-day exponential moving averages, as well as the 38.2% Fibonacci retracement zone.

India VIX still elevated

Volatility continues to hover at higher levels, with the India VIX rising 3 per cent to close at 21.63. While the ceasefire may reduce short-term panic, analysts caution that volatility may persist till elections conclude.

FIIs remain sellers; DIIs buy the dip

On Friday, foreign investors net sold shares worth Rs 3,798 crore, while domestic institutions were strong buyers to the tune of Rs 7,278 crore. The reversal of FII outflows will be key for a sustained rally.

Rupee recovers; RBI likely intervened

The rupee ended Friday 22 paise stronger at 85.36 against the US dollar. Traders said the RBI may have stepped in to stabilise the currency amid external pressures.

Global cues: Stocks rally, gold dips, oil rises

Asian shares gained on Monday as progress in US-China trade talks lifted sentiment. Gold prices fell as safe-haven demand ebbed, while oil prices rose on hopes of better global demand.

Stocks in F&O ban

RBL Bank, CDSL, and Manappuram remain under the F&O ban list for the day, having breached 95 per cent of their market-wide position limits.

Outlook: The cooling of geopolitical tensions and supportive global signals are expected to drive a strong start to the week. However, traders must watch 23,800 as a key pivot on the Nifty.