Pre-Market Setup (June 5): GIFT Nifty futures up 10 pts; markets likely to open flat amid global caution

Indian equities are expected to open on a flat to slightly positive note on Thursday, June 5, as indicated by GIFT Nifty futures, which were up by 14 points or 0.06 per cent at 24,730. This signals a mildly optimistic start for benchmark indices, with traders likely to focus on stock-specific action amid a consolidating market setup.

Markets closed with modest gains in the previous session, buoyed by positive global cues, but analysts maintain a cautious tone. The broader market remains in consolidation, driven by lingering macroeconomic uncertainty, weak global data prints, and anticipation around central bank moves. Traders are likely to stay selective ahead of upcoming economic releases and US Fed commentary.

Technical view

From a technical standpoint, a bearish crossover in the RSI (Relative Strength Index) momentum oscillator signals fading strength, implying that indices could face limited upside in the near term. Analysts see immediate support for Nifty at 24,500; breaching this could lead to further declines. On the upside, resistance is pegged at 24,750 and 24,900 levels.

India VIX cools off; volatility eases

The India VIX — a gauge of near-term volatility — dropped 4.9 per cent to close at 15.74 on Wednesday, reflecting declining fear in the market. This drop in volatility may support intraday stability, especially in largecap-heavy indices.

Global Markets

US markets gave a mixed closing overnight. The Dow Jones Industrial Average fell 0.22 per cent, while the Nasdaq rose 0.32 per cent and the S&P 500 remained largely flat. The mood was impacted by soft economic data, which fuelled expectations of interest rate cuts by the Federal Reserve.

Asian markets opened cautiously this morning:

• Japan’s Topix down 0.6%

• Australia’s ASX 200 up 0.2%

• Hang Seng futures up 0.5%

• Euro Stoxx 50 futures largely flat

S&P 500 futures were unchanged at 9:43 am Tokyo time.

Commodities

Gold prices edged higher as weak US data prompted a shift towards safe-haven assets. Meanwhile, crude oil slipped in early trade, dragged by rising US gasoline and diesel inventories and a cut in Saudi Arabian crude prices for Asia.

F&O ban list

Aditya Birla Fashion and Retail (ABFRL) 
Manappuram Finance  remain under the F&O ban on Thursday after surpassing 95 per cent of the market-wide position limit.

Institutional flows

Foreign Institutional Investors (FIIs) remained net sellers on Wednesday, offloading shares worth Rs 1,076 crore, as per provisional data. On the other hand, Domestic Institutional Investors (DIIs) were net buyers, pumping in Rs 2,567 crore, providing some cushion to the markets.

Additionally, FIIs trimmed their short positions in index futures, reducing net shorts from Rs 1.04 lakh crore to Rs 1.02 lakh crore.

Currency Watch

The rupee extended its losing streak for a second day, closing 29 paise lower at 85.90 per dollar (provisional). Risk aversion and consistent FPI outflows have weighed on the domestic currency.

Market Outlook

Markets may continue to trade in a range-bound manner, with global developments, FII flows, and technical levels acting as key triggers. Traders are advised to stay nimble with stop-losses, especially in the absence of strong directional cues.