Indian benchmark indices are set to open higher on Monday, tracking the positive sentiments in the Asian peers, after a surprise 50 basis points rate cut by the RBI on Friday. However, trade talks between Washington and Beijing shall be keenly tracked by the traders at Dalal Street. US economic data and spread and onset of monsoon in India shall also support the sentiments.
Nifty futures on the NSE International Exchange traded 84.20 points, or 0.34 per cent, lower at 25,180.50, hinting at a positive start for the domestic market on Monday. Asian stocks opened higher Monday with the US and China set to resume trade negotiations. KOSPI and Hang Seng gained 1.5 per cent, while Nikkei rose 1 per cent in the early trade.
The impact of the rate cut is expected to continue influencing market sentiment. Rate-sensitive pack, along with select themes like railways, are likely to stay in focus, while other sectors may contribute on a rotational basis, said Ajit Mishra, SVP of Research at Religare Broking. “We continue to recommend a ‘buy on dips’ strategy with an emphasis on selective stock picking,” he said.
US stocks closed higher on Friday after a better-than-expected jobs report calmed worries about the economy. The Dow Jones Industrial Average rose 442.88 points, or 1.05 per cent, to 42,762.62, the S&P 500 gained 61.02 points, or 1.03 per cent, to 6,000.32 and the Nasdaq Composite gained 231.50 points, or 1.20 per cent, to 19,529.95.
The US dollar held steady against all major currencies on Monday, as exuberance over an upbeat employment report gave way to caution ahead of pivotal US-China trade talks set to take place in London later in the day. The dollar index was steady at 99.169.
Oil prices held on to last week’s gains early on Monday as investors waited for US-China trade talks. Brent crude futures were flat at $66.47 a barrel, while US West Texas Intermediate crude was trading up 1 cent at $64.59. In the commodity market, spot gold was down half a per cent to $3,306.18 per ounce.
SBI Securities expects global cues along with domestic economic data flow (CPI and trade balance data) to act as a catalyst for the market. Monsoon in 2025 made the earliest onset and progress and spread will be keenly watched. “In the US, May 2025 CPI, PPI and weekly initial jobless claim will also provide a hint on economic health and interest rate outlook,” it said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,009.71 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 9,342.48 crore on a net-net basis. FIIs sold shares worth Rs 3,565 crore in the cash market through June 6.
With FII selling getting completely eclipsed by DII buying, FIIs are likely to be on the back foot in the coming days. FIIs have been consistently selling in the debt market too due to the low differential in bond yields between US and Indian bonds, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “The only concern is the high valuations which leave not much room for the rally to continue.”
Nifty & Sensex outlook
Amol Athawale, VP-technical Research at Kotak Securities believes that the 20-day SMA will act as a trend decider level. As long as the market remains above this level, the bullish formation is likely to continue, with 25,100/82,600 serving as the immediate resistance zone for short-term traders.
“A successful breakout above 25,100/82,600 could push the market up to 25,400–25,500/83,500-83,900. Conversely, if the market falls below 24,800/81,600, sentiment could change, and the market may retest the 24,500/80,600 level. Further downside could extend, potentially dragging the market down to 24,350/80,200,” he said.
Nifty posted a strong close and is on the verge of breaking above its recent swing high of 25,116, said Devarsh Vakil, Head of Prime Research at HDFC Securities. “A sustained move above this level could propel the index toward 25,307, marking a 78.6 per cent Fibonacci retracement of the full swing from 26,277 to 21,743. On the downside, 24,845 may offer near-term support.”
Nifty Bank outlook
Nifty Bank indicates an overall upward trend, and buying at lower levels suggests that a sideways to bullish phase is underway. It has managed to hold at higher levels, with downside support near the 56,500–56,000 range, said Choice Broking. “The RSI stands at 67.45, indicating a mildly bullish bias. The index has broken out of the sideways range, signaling renewed momentum,” it said.
Nifty Bank formed a robust bullish candle on the daily chart, confirming a breakout from an ascending triangle pattern, which suggests further upside potential, said Om Mehra, Technical Research Analyst at SAMCO Securities. The index holds above all major moving averages, indicating a sustained uptrend.
“The daily Bollinger Bands are on the upper side, suggesting that the current rally can extend. The daily RSI remains steady maintaining a strong bullish zone. The resistance lies at 56,900, followed by the psychological mark of 57,000. On the downside, the support base has moved higher to 56,200. The broader outlook remains constructive, favoring a buy-on-dips strategy,” he said.
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