Nifty 50, Sensex Trade Flat Ahead of RBI Policy Outcome; Midcap and Smallcap Indices Gain Up to 0.67%

Market Update at 12:14 PM: Indian benchmark equity indices traded in a narrow range during the afternoon session on Thursday as investors largely remained on the sidelines ahead of the Reserve Bank of India's Monetary Policy Committee (MPC) decision, which is scheduled to be announced on Friday.

As of 12:00 PM, the Nifty 50 was up 11.75 points, or 0.05 per cent, at 23,423, while the Sensex gained 43.85 points, or 0.06 per cent, to trade at 74,391.09.

Broader markets continued to outperform the benchmark indices. The Nifty MidCap index advanced 0.67 per cent, while the Nifty SmallCap index rose 0.57 per cent, reflecting sustained buying interest in the broader market segment.

On the sectoral front, information technology, Real Estate and private banking stocks witnessed mild selling pressure. The Nifty IT, Nifty Realty and Nifty Private Bank indices were among the key laggards during the session.

Meanwhile, consumer-focused and energy-related stocks led the gains. The Nifty Consumer Durables, Nifty Oil & Gas and Nifty Chemical indices emerged as the top-performing sectoral indices, supporting overall market sentiment.

Market participants remained cautious as they awaited the RBI's policy announcement for cues on interest rates, inflation outlook and economic growth projections, which could influence the market's near-term direction.

Market Update at 09:35 AM: Indian equity benchmark indices opened lower on Thursday, extending their losses in early trade as renewed geopolitical tensions between the U.S. and Iran weighed on global market sentiment.

At around 9:19 AM, the Nifty 50 was trading 52.65 points, or 0.22 per cent lower, at 23,355.10. The Sensex also declined 126.59 points, or 0.17 per cent, to 74,219.58.

The weakness was not limited to frontline indices. Broader markets also witnessed selling pressure, with the Nifty MidCap index trading 0.22 per cent lower and the Nifty SmallCap index down 0.15 per cent during the session.

Investor sentiment remained cautious amid escalating tensions in the Middle East. Iran reportedly struck the Kuwait International Airport early Wednesday. The development came a day after the U.S. Central Command stated that it had intercepted multiple ballistic missiles launched by Iran and carried out defensive strikes on Qeshm Island in the Persian Gulf.

Market participants are closely monitoring geopolitical developments, as any further escalation could impact global risk appetite and energy prices.

Adding to the uncertainty, investors are also awaiting the outcome of the Reserve Bank of India's Monetary Policy Committee (MPC) meeting, which is scheduled to be announced on Friday. The policy decision is expected to provide cues on interest rates and the central bank's outlook on economic growth and inflation.

Meanwhile, U.S. President Donald Trump said during a media interaction that Iran had agreed not to possess nuclear weapons. Separately, the U.S. administration stated that Israel had agreed to a ceasefire with Lebanon, provided Hezbollah also halts hostilities.

With global geopolitical risks and the upcoming RBI policy announcement in focus, investors are expected to remain cautious in the near term.

Pre-Market Update at 7:45 AM: Indian benchmark indices Sensex and Nifty 50 are expected to open on a weak note on Thursday, June 4, amid negative global cues and continued uncertainty surrounding the escalating U.S.-Iran conflict. Investor sentiment remained cautious as geopolitical tensions kept crude oil prices elevated and raised concerns about inflationary pressures across global economies.

Gift Nifty was trading around the 23,317 level, indicating a negative opening for domestic equities. Asian markets traded lower, while Wall Street ended sharply in the red overnight as investors reacted to developments in the Middle East and their potential impact on global growth and inflation.

The geopolitical situation remains a key trigger for markets. Iran's Foreign Minister said talks aimed at ending the conflict had produced no tangible progress, while fresh military strikes by both the U.S. and Iran added pressure on an already fragile ceasefire. However, U.S. President Donald Trump expressed optimism that a breakthrough could be achieved over the weekend. Separately, Israel and Lebanon agreed to implement a ceasefire, although both sides stressed that lasting peace would depend on a complete halt to hostilities by Iran-backed Hezbollah.

The latest U.S. Federal Reserve Beige Book survey highlighted that while artificial intelligence-led investments continue to support economic activity, rising costs linked to the Middle East conflict are contributing to inflationary pressures. Higher energy prices have affected several sectors, including shipping, packaging, groceries and fertilizers.

Economic data from the U.S. also remained supportive. The Institute for Supply Management reported that the non-manufacturing Purchasing Managers' Index (PMI) rose to 54.5 in May from 53.6 in April, exceeding market expectations of 53.8 and indicating stronger activity in the services sector.

Institutional activity remained mixed. Foreign Institutional Investors (FIIs) were net sellers on June 3, offloading equities worth Rs 5,616.56 crore. Domestic Institutional Investors (DIIs) offset the selling pressure by purchasing shares worth Rs 5,740.89 crore.

In the commodities market, gold prices advanced as a weaker U.S. dollar and softer oil prices boosted safe-haven demand. Spot gold rose 0.4 per cent to USD 4,450.16 per ounce, while U.S. gold futures for August delivery gained 0.2 per cent to USD 4,477 per ounce.

Crude oil prices eased after Israel and Lebanon reached a ceasefire agreement, raising hopes of a broader de-escalation in the region. Brent crude futures fell 0.69 per cent to USD 97.14 per barrel, while U.S. West Texas Intermediate crude slipped 0.65 per cent to USD 95.40 per barrel. Meanwhile, the Dollar Index remained near a two-month high at 99.47.

From a derivatives perspective, the Put-Call Ratio (PCR) for the Nifty 50 June expiry stood at 0.98. Significant Put open interest was concentrated at the 23,300 strike, while the highest Call open interest among nearby out-of-the-money strikes was seen at 24,000, suggesting it could act as a key resistance level.

Technically, immediate resistance for the Nifty 50 is placed at 23,560, which marks the neckline of a potential double-bottom pattern. A sustained move above this level may open the door for gains toward the 50-day moving average at 23,685 and the 20-day moving average at 23,737. On the downside, immediate support is seen at 23,230, followed by a stronger support zone near 23,100.

In the derivatives segment, Amber Enterprises India and Kaynes Technologies remain under the F&O ban list for June 4.

On Wednesday, Indian equities ended lower but recovered significantly from Intraday lows. The Sensex declined 303.67 points, or 0.41 per cent, to close at 74,346.17, while the Nifty 50 fell 77.95 points, or 0.33 per cent, to settle at 23,405.60.

Wall Street also witnessed broad-based selling. The Dow Jones Industrial Average dropped 620.72 points, or 1.21 per cent, to 50,687.07. The S&P 500 fell 56.06 points, or 0.74 per cent, to 7,553.72, while the Nasdaq Composite lost 239.92 points, or 0.89 per cent, to close at 26,853.98.

Among major technology stocks, Nvidia declined 3.62 per cent, Microsoft fell 3.17 per cent, Amazon lost 2.53 per cent and Apple slipped 1.57 per cent. On the positive side, AMD gained 4.02 per cent and Meta Platforms advanced 4.24 per cent. IBM was among the worst performers, plunging 7.17 per cent. Semiconductor stocks delivered mixed performance, with Marvell, Intel, Qualcomm and Sandisk gaining between 3.7 per cent and 6.7 per cent.

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

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