Pre-Market Setup (June 9): GIFT Nifty futures up 70 pts; D-Street likely to open higher

GIFT Nifty rose more than 70 points in early trade on Monday morning suggesting a constructive start for the benchmark indices. Last recorded a decline of 71 points to 25,169.50 on NSE IX. After a week of consolidation we are expecting investors will want to break above sustained26634.8 and then we could see a move towards the zone of 25,600-25,800. This momentum might depend on macro data and weather updates throughout the week.

Technical View

Technicals suggest if we can break above 25,200, then we may be in for further upside. 24,400-24,600 has support band the market will look to hold. With declining volatility, analysts suggest if we can hold a sustained close above the breakout we may be moving into a second leg of the rally.

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India VIX eases

The India VIX index rose by 3 per cent to 14.63, bringing volatility to continue to decline further from a low point. This should mean more stability returning to the markets and helping to rebuild confidence in investors ahead of important domestic events.

Global Market

Global cues remained largely positive. U.S. indices ended higher on Friday following upbeat job data and a rebound in Tesla shares. Meanwhile, Asian markets opened strong with Japan’s Topix rising 0.7 per cent and Euro Stoxx 50 futures up 0.3 per cent. S&P 500 futures were largely flat in early Tokyo trade.

Currency Check

The dollar held firm ahead of high-stakes US-China trade talks in London. Gold prices slipped as stronger US jobs data dimmed hopes of immediate Fed rate cuts, reducing safe-haven demand. On the other hand, oil prices held gains from last week. Brent was flat at $66.47 per barrel, while WTI crude inched up to $64.59.

F&O ban list

Manappuram, ABFRL, and Chambal Fertilisers remain in the F&O ban list today after crossing 95 per cent of the market-wide position limit. Traders must exercise caution while dealing with these counters.

FII-DII flows

Foreign institutional investors (FIIs) were net buyers to the tune of Rs 1,010 crore on Friday. Domestic institutional investors (DIIs) continued their aggressive accumulation, buying Rs 9,342 crore worth of equities, adding momentum to the ongoing rally.

Rupee gains post RBI rate cut

The rupee appreciated 11 paise to close at 85.68 against the US dollar. The upmove came after the RBI delivered a 50 basis point repo rate cut, higher than market expectations, aimed at boosting economic growth.

FII futures position improves

FIIs reduced their net short position in index futures from Rs 1.06 lakh crore to Rs 92,600 crore, indicating renewed bullishness in the near term.