Pre-Market Setup (May 4): GIFT Nifty futures rise over 60 pts; markets likely to open higher amid firm global cues

Indian markets are likely to open on a positive note on Wednesday, June 4, tracking strong global sentiment and a bounce in GIFT Nifty futures. The GIFT Nifty (formerly SGX Nifty) was trading 62.50 points or 0.25 per cent higher at 24,727 as of 7 am, indicating that benchmark indices could extend their recovery following Tuesday’s flat finish.

Global markets 

Major US indices ended higher overnight, supported by gains in chipmakers like Nvidia and optimism over possible trade talks.

• Dow Jones rose 0.51%

• S&P 500 gained 0.54%

• Nasdaq advanced 0.81%

This momentum has spilled over into Asia, supporting risk appetite in the region.

Asian equities open strong; global tone remains constructive

Asian markets opened higher after data showed resilience in the US labour market.

• Japan’s Topix rose 0.5%

• Australia’s ASX 200 climbed 0.5%

• Euro Stoxx 50 futures edged up 0.2%
  S&P 500 futures, however, remained little changed in early Asian trade.

Technical outlook: 24,500 is the key level to watch

On the charts, Nifty’s near-term support lies at 24,500. Analysts caution that a breach below this could lead to a deeper correction towards 24,000. However, as long as the index holds above 24,500, a move towards the 24,700–24,750 zone is likely.

India VIX, the volatility index, dropped 3.5% to 16.56, indicating reduced fear among market participants.

FII-DII flow: Foreign investors intensify sell-off

Foreign portfolio investors (FPIs) were net sellers worth Rs 2,853 crore on Tuesday, marking continued caution amidst global uncertainties.
Domestic institutional investors (DIIs) countered the selling pressure, buying shares worth Rs 5,908 crore.

In the futures segment, FIIs increased their net short positions from Rs 89,066 crore to Rs 1.04 lakh crore, reflecting heightened hedging activity.

Currency Watch

The Rupee depreciated by 22 paise to close at 85.61 per US dollar on Tuesday. Dollar strength and equity outflows weighed on the currency. Traders await US employment data and further clarity on US-China tariff negotiations.

Commodities trade mixed

• Gold remained steady as markets weighed US-China trade uncertainty against upbeat US jobs data.

• Crude oil prices slipped in early Asian trade due to a rise in OPEC+ supply and fears of weaker demand.

F&O ban list

Manappuram Finance is under the F&O ban today after exceeding 95% of the market-wide position limit.

What to watch today

• RBI's monetary policy stance and commentary ahead of Friday’s decision

• US macro triggers including upcoming jobs report

• Global risk sentiment, particularly in light of tariff talks and geopolitical tensions

Despite global jitters, strong domestic macro fundamentals and expectations of a rate cut from the Reserve Bank of India may continue to cushion the downside for Indian markets. Traders are advised to monitor the 24,500 level closely for directional cues.