Indian equities are likely to open flat to positive on Thursday, June 5, as indicated by GIFT Nifty futures which were up 14 points or 0.06 per cent at 24,730. The markets will likely have a mildly positive open, and traders will likely remain focused on stock-specific action given the current market setup.
Markets closed with slight gains yesterday on positive global cues, however, analysts say to be cautious. Overall, the markets remain in a consolidation phase as macro uncertainty lingers, weak global data prints persist, and traders await signals from central banks. Traders will likely remain selective as analytic releases and US Fed commentary loom.
Technical view
From a technical perspective, a bearish crossover in the RSI (Relative Strength Index) momentum oscillator indicates weakening strength, showing indices may only be shown limited upside in the short term. Analysts note that immediate support for Nifty stands at 24,500, if this support breaks the next level down will be less clear. On the upside, immediate resistance is seen at the 24,750 and 24,900 levels.
India VIX cools off; volatility eases
The India VIX, a measure of near-term volatility dropped 4.9 per cent to close at 15.74 on Wednesday, which indicates that fear in the market has subsided. A reduction in volatility may provide support for intraday stability especially in largecap indices.
Global Markets
U.S. markets had a mixed close overnight. The Dow fell 0.22 per cent, while the Nasdaq rose 0.32 per cent and the S&P 500 was little changed. Overall, sentiment was dampened by soft economic data that increased expectations for interest rate cuts by the Federal Reserve.
Asian markets opened cautiously this morning:
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Japan’s Topix down 0.6%
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Australia’s ASX 200 up 0.2%
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Hang Seng futures up 0.5%
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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)Â
Manappuram Finance  remain under the F&O ban on Thursday after surpassing 95 per cent of the market-wide position limit.
Institutional flows
As per provisional data, Foreign Institutional Investors (FIIs) were net sellers today, selling shares worth Rs 1,076 crore. Meanwhile, Domestic Institutional Investors (DIIs) were net buyers, buying shares worth Rs 2,567 crore; DIIs provided some cushion to the markets today.
FIIs also reduced their short position in index futures, reducing their net short position 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 remain in a range-bound course, where global developments, FII flows, and technical levels are the main triggers. Traders are advised to remain agile with stop-losses, especially when directionality is not strong.
