The Nifty 50 ended the week with a loss of 171.55 points (-0.72%), consolidating within a 605-point range that saw highs of 24,089.80 and lows of 23,484.75. According to The Economic Times, the sharp decline on Friday was primarily driven by MSCI rebalancing-related flows, resulting in accelerated profit-taking and a weak close for the week. India VIX rose by 9.60% to 16.19, reflecting increased volatility expectations and market nervousness following the late-week selloff. The GIFT Nifty is trading around 23,887 level, indicating a gap-down start for Indian stock market indices with a discount of nearly 109 points from the Nifty futures' previous close. The Sensex declined 141.90 points, or 0.19%, to close at 75,867.80, while the Nifty 50 settled 6.55 points, or 0.03%, lower at 23,907.15. However, the latest data shows Sensex dropped over 1,092 points to 74,776 while Nifty 50 crashed nearly 359 points to 23,547 on Friday afternoon, with the sharp losses wiping off nearly ₹6 lakh crore from the total market capitalisation of all companies listed on BSE, pulling it down to ₹465 lakh crore.
US stocks touched all-time highs amid reports of a diplomatic breakthrough in the US-Iran conflict. According to market reports, the S&P 500 advanced 0.58% to 7,563.63, while the Nasdaq Composite surged 0.91% to 26,917.47, hitting intraday all-time highs. The rally was driven by reports that the US and Iran have reached a tentative deal to extend a ceasefire by 60 days, though US Vice President JD Vance said the two nations were "close" to reaching a deal, but "not there yet." The Dow Jones Industrial Average rose 24.69 points, or 0.05%, to 50,668.97. Technology stocks led the gains with Nvidia rising 0.78%, AMD surging 4.55%, Microsoft gaining 3.47%, Apple adding 0.53%, and Tesla up 0.40%. However, Brent crude oil prices rose 1.2% on Monday morning to near $93 per barrel, as uncertainties prevail in the Middle East, with no deal being finalised. Over the weekend, both sides exchanged proposals, seeking revisions to the deal.
Asia-Pacific markets surged on Friday as investors looked at the possibility of an end to US-Iran conflict. According to market reports, Japan's Nikkei 225 gained 0.88%, while the broader Topix index advanced 0.53%. In South Korea, the Kospi jumped 2.68% and the small-cap Kosdaq added 0.25%. Australia's S&P/ASX 200 climbed 0.72%. Hong Kong's Hang Seng Index futures were last at 24,995, indicating a flat opening. The rally came as US and Iranian negotiators edged toward a deal to extend their fragile ceasefire for 60 days, but it awaits President Donald Trump's approval. On Monday morning, Asian markets continued their record run as the rally in tech stocks lifted the Japanese and Korean markets. Japan's Nikkei jumped 1%, Korea's Kospi soared 4%, and Hong Kong's Hang Seng rose 0.4%. The US stock market futures opened in the green on Monday, following the previous week's robust gains, with the Dow Jones rallying 0.7% to hit a new record high on Friday.
Crude oil trajectory holds the key for dictating stock market trend in June. As we enter this month, markets around the world are celebrating a 19% monthly decline in crude prices with the hope that prices might settle in the range of $70-$75 by the end of the month amid reports of US and Iran making efforts to strike a peace deal. However, the conflict between the US and Iran, now in its fourth month, has led to an energy shock with the closure of the Strait of Hormuz, a key passage for global oil and gas needs. Widely tracked Brent futures are currently at $95 per barrel, much higher than the $60 per barrel mark before the onset of conflict on 28 February. During the height of the Middle East crisis, the oil futures had jumped to above $120 per barrel. Sunny Agrawal from SBI Securities noted that if crude oil prices go back to $80-85/bbl, then definitely it will be positive for domestic equities, as this will take off pressure from the Indian rupee and the narrative will turn favourable for the Indian economy. Kotak Institutional Equities expects a gradual market recovery even if the West Asia war ends, as the impact of high crude prices is non-linear and negative for India's current account deficits, balance of payments, fiscal deficit, growth and inflation.
The Nifty 50 index formed a gravestone doji-like candlestick pattern on the daily timeframe, indicating indecisiveness at higher levels. According to The Economic Times, the immediate resistance levels are placed at 23,800 and 24,000, while supports come in at 23,350 and 23,100. The weekly RSI stands at 40.84 and remains below the neutral 50 mark, indicating subdued momentum with no divergence against price. The weekly MACD remains below its signal line and continues to stay in negative territory, reflecting a lack of strong upward momentum. Last week, the NIFTY50 index closed 0.7% lower, reversing gains of the week in the final hour of trading on Friday. The index witnessed a sharp selloff across the index heavyweights, which broke the major support levels on the technical charts. The index closed below the 20 EMA of 23,800, which is the first crucial support level. During last week's volatility, the index never managed to cross the 50 EMA level of 24,000, which remains a key resistance. Technical analyst Sudeep Shah from SBI Securities notes that the 20-day EMA zone of 23,750-23,800 is likely to act as an immediate hurdle for the index, while the zone of 23,300-23,250 remains a crucial support area. A breach below 23,250 could intensify selling pressure and open the doors for a decline towards the psychologically important 23,000 mark.
According to The Economic Times analysis of Relative Rotation Graphs®, the Nifty Midcap 100, Energy, Media, Pharma, and Metal Indices are inside the leading quadrant, likely to relatively outperform the broader markets. The PSU Bank Index has rolled inside the lagging quadrant, with the Nifty Bank, Services Sector, Financial Services, and Auto Indices also languishing inside this quadrant. The FMCG and Realty Index are inside the improving quadrant, continuing to improve their relative performance against the benchmark. Given the current technical setup, traders should maintain a balanced and selective approach, with fresh buying remaining stock-specific and focused on pockets displaying relative strength. The coming week is likely to reward selectivity and prudent positioning rather than broad-based aggressive exposure. Market experts maintain that a sustained move above 23,800 would improve the near-term technical outlook and may trigger fresh buying interest, though the broader market structure remains range-bound with elevated volatility. GIFT NIFTY futures were trading flat on Monday morning, indicating a muted start for the NIFTY50. Apart from global cues, investors will wait for the RBI's policy decision, which will be announced later this week. The 23,700, 23,800, 23,900 and 24,000 calls witnessed strong open interest addition and concentration, with 24,000 CE holding the highest open interest, indicating limited upside for the NIFTY50. On the flipside, 23,000 puts hold the highest open interest, indicating a near-term support for NIFTY's tomorrow's expiry.
