Pre-Market Update: Nifty 50 Likely to See Short-Covering Rally at Opening Bell on July 9

The Indian stock market is expected to open on a positive note on Thursday, July 9, with the benchmark indices likely to witness a short-covering rally after Wednesday's sharp selloff. Investor sentiment, however, remains cautious amid escalating tensions between the U.S. and Iran, rising crude oil prices and concerns over global inflation.

At 7:27 AM, the GIFT Nifty was trading around 23,966, a premium of nearly 94 points over the previous close of Nifty futures, indicating a mildly positive opening for domestic equities. Asian markets traded higher in early trade, while Wall Street ended on a mixed note overnight as investors assessed the impact of renewed geopolitical tensions in the Middle East.

Geopolitical tensions intensified after the U.S. military carried out fresh strikes on Iran to ensure the Strait of Hormuz remains open for global shipping. The action came shortly after U.S. President Donald Trump said the interim agreement aimed at ending the conflict had collapsed, raising concerns over global energy supplies.

Minutes of the U.S. Federal Reserve's June policy meeting showed that some policymakers believed higher interest rates could be warranted due to inflationary pressures arising from the Middle East conflict. With the labour market remaining resilient, a few officials argued that prevailing economic conditions justified an increase in the federal funds rate.

The International Monetary Fund (IMF) lowered its global growth forecast for 2026 to 3.0 per cent from 3.1 per cent projected in April, citing the economic impact of the ongoing Middle East conflict despite continued gains from artificial intelligence. The IMF also trimmed India's FY2027 GDP growth forecast to 6.4 per cent from 6.5 per cent, while continuing to identify India as one of the fastest-growing major economies.

U.S. Treasury yields climbed to multi-week highs as higher crude oil prices fuelled inflation concerns. The benchmark 10-year Treasury yield rose to a seven-week high of 4.597 per cent, while the 30-year yield touched 5.067 per cent, also its highest level in seven weeks. The two-year Treasury yield advanced to 4.235 per cent.

Japan's benchmark 10-year government bond yield climbed to 2.880 per cent, its highest level since September 1996. The two-year yield rose to 1.44 per cent, while the five-year yield increased to 1.995 per cent as investors factored in higher inflation risks.

Crude oil prices extended gains after the latest U.S. strikes on Iran heightened concerns over supply disruptions. Brent crude rose 1.03 per cent to USD 78.82 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.98 per cent to USD 74.24 per barrel.

Gold prices edged lower after hitting a one-week low in the previous session. Spot gold declined 0.3 per cent to USD 4,066.24 per ounce, while U.S. gold futures slipped 0.1 per cent to USD 4,077 per ounce. Spot silver also fell 0.3 per cent to USD 58.13 per ounce.

Meanwhile, the U.S. dollar remained firm against major currencies, with the dollar index holding at 100.96. The greenback also traded near a one-week high against the Japanese yen at 162.41.

From the derivatives perspective, the Put-Call Ratio (PCR) for the July expiry stood at 0.60. On the Put side, significant open interest addition was seen at the 23,600 strike, while the highest open interest remained concentrated at the 23,500 strike. On the Call side, the highest open interest addition was recorded at the 24,200 strike, while maximum open interest remained at the 24,500 strike.

Technically, Nifty 50 remains under pressure after Wednesday's sharp decline. Immediate support is placed at 23,807, followed by 23,690 and 23,501 based on pivot levels. A decisive break below the 23,800 mark could trigger further weakness towards the 23,600-23,500 zone. On the upside, resistance is seen at 24,185, followed by 24,302 and 24,491.

Among stocks in focus, State Bank of India will remain in the spotlight as SBI Funds Management launches its IPO on July 14. The issue is a complete offer-for-sale of 20.37 crore shares, with State Bank of India selling a 6.3 per cent stake and Amundi India Holding divesting 3.7 per cent. The IPO price band has been fixed at Rs 545-574 per share.

JSW Energy commissioned 1,081 MW of renewable energy capacity since April 2026, taking its total installed capacity to 14,535 MW. Graphite India decided to discontinue its Specialities and Coating divisions in Germany due to weak demand and the prolonged impact of the Russia-Ukraine war.

National Aluminium Company (NALCO) signed a 50:50 joint venture agreement with NLC India to establish a 1,080 MW captive thermal power plant at Angul, Odisha.

TVS Motor Company partnered with Indian Oil Corporation to promote sustainable last-mile LPG cylinder distribution using TVS King Kargo HD vehicles, while HFCL launched OptiQ AI as the unified brand for its optical connectivity portfolio targeting AI, cloud and hyperscale data centre applications.

There are no stocks under the F&O ban for July 9.

On July 7, Foreign Institutional Investors (FIIs) remained net buyers, purchasing equities worth Rs 1,962.80 crore. Domestic Institutional Investors (DIIs) were net sellers, offloading shares worth Rs 790.16 crore.

Indian equities witnessed heavy selling on Wednesday as escalating U.S.-Iran tensions and rising crude oil prices triggered risk aversion. The Sensex plunged 1,677.12 points, or 2.15 per cent, to close at 76,503.60, while the Nifty 50 fell 516.65 points, or 2.12 per cent, to settle at 23,882.05.

U.S. markets ended on a mixed note on Wednesday after President Donald Trump declared the interim Iran peace agreement had ended, reviving geopolitical concerns. The Dow Jones Industrial Average declined 1.09 per cent to 52,348.39, while the S&P 500 slipped 0.28 per cent to 7,482.71. The Nasdaq Composite rose 0.20 per cent to 25,870.65.

Among major technology stocks, Nvidia gained 3.65 per cent and Broadcom surged 4.83 per cent. Apple advanced 0.88 per cent, while Microsoft fell 1.41 per cent. Meta Platforms declined 2.02 per cent, Alphabet lost 1.35 per cent, Tesla slipped 2.23 per cent and SpaceX eased 0.81 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.