GIFT Nifty opened the week down by 20 points, signaling a cautious start to Monday’s trade as global mood remains upbeat but not without fresh risks on the horizon.
Investors are weighing improved foreign fund flows and easing geopolitical worries against looming tariff tensions and uncertainty surrounding US trade measures. With India’s markets wrapping up a five-week consolidation stretch, today’s session could set the tone for July.
Calm After the Storm — or Just the Eye of It?
Markets saw a bit of breathing space last week.
A cocktail of optimism brewed by steady institutional buying, a stronger rupee, and relatively stable global headlines helped bulls pull the index out of its tight range. But don’t pop the champagne yet.
Yes, FII flows finally showed up meaningfully. And yes, that helped the Nifty and Sensex nudge upward. But traders are still uneasy. Tariff escalations between global powers remain on everyone’s radar, especially with the US expected to reintroduce key levies from July 9.
GIFT Nifty as a Sentiment Barometer
The GIFT Nifty index, tracked out of Gujarat International Finance Tec-City, dipped about 20 points early Monday, reflecting mild risk-off mood heading into today’s open. While a 20-point move might seem modest, it’s the tone that matters.
Some traders see it as a sign of investors catching their breath after last week’s run-up.
Others say it’s the shadow of unresolved trade negotiations and potential tariff triggers.
“Markets don’t like surprises. The tariff developments are being watched closely, and traders will likely be nimble until there’s more clarity,” said an equity strategist at a domestic brokerage, requesting anonymity.
FIIs Ease Off the Shorts, Finally
One of the standout shifts last week was the behavior of foreign institutional investors. According to exchange data:
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FII short positions in index futures dropped from ₹34,967 crore on Thursday to ₹33,518 crore on Friday.
It’s not a massive unwind, but it suggests some easing of their bearish bets.
Here’s how the futures positioning has moved:
| Date | FII Net Position in Index Futures (₹ Cr) |
|---|---|
| June 27 | -34,967 |
| June 28 | -33,518 |
| Change | +1,449 |
That’s a subtle yet positive indicator — perhaps a sign that FIIs are warming back up to Indian equities, at least cautiously.
Rupee Finds Its Legs, But It’s Still a Balancing Act
Another quiet boost came from the currency front.
The Indian rupee strengthened mildly last week, helped by a mix of foreign fund inflows and a bit of dollar softness. While not dramatic, the currency’s resilience offers some cushion to equity sentiment.
But with the dollar index still holding strong and crude hovering near uncomfortable highs, any sudden shift in global risk appetite could quickly flip the script.
One trader noted, “The rupee’s recent moves reflect short-term confidence, but it’s not out of the woods. Oil, Fed expectations, and tariff stories could change things fast.”
What Traders Are Watching This Week
There’s no shortage of potential triggers this week, and markets will be hungry for clarity on a few key points.
• U.S. Tariff Action: The Biden administration’s July 9 deadline to reinstate some tariffs on foreign goods, including Chinese tech and steel, is keeping traders up at night.
• Trade Talks: Canada and U.S. restarted discussions after tensions over the Digital Services Tax. Any breakthroughs here could ripple across sentiment.
• FII Flow: After months of outflows, FIIs showed signs of buying again last week. Can it hold?
• Crude Oil Prices: Brent crude has stayed sticky above $83 a barrel. A sudden jump could spook bond and equity markets alike.
• Quarterly Results: Early Q1 earnings trickle in this week. Any outlier numbers could jolt sector-specific stocks.
Technical Levels to Track
Technicians say this week’s action could be decisive. Last week’s rally helped the Nifty bounce off its support near 23,300.
Short-term resistance is now pegged at 23,750–23,800.
If bulls can muscle past that, fresh highs are possible. If not, brace for a retest of lower supports.
According to analysts from ICICI Direct:
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Buy-on-dips strategy still holds, as long as 23,300 doesn’t break
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Watch bank stocks and FMCG for possible leadership
Sector Chatter: Banks Hold Ground, FMCG in Spotlight
Banking stocks held up reasonably well last week, even as bond yields fluctuated. Credit growth remains stable, and NIM pressures are being monitored — but no big surprises yet.
FMCG stocks might hog the limelight this week amid expectations of rural demand recovery and early monsoon data. Traders are watching companies like HUL and Britannia for signals.
Also, auto stocks could get busy ahead of monthly sales figures.
Eyes on the Headlines, Feet on the Floor
Monday’s 20-point dip in GIFT Nifty is no disaster, but it’s a reminder that the road ahead isn’t all sunshine and rainbows. With markets breaking out of a month-long range, every headline will count.
Tariffs, trade, oil, and foreign money — it’s all in play.
But for now, investors seem to be cautiously optimistic. Maybe even a little hopeful.
After five weeks of treading water, it feels like the market finally wants to swim.
