Pre-Market Update: Indian Stock Market Set for Negative Start on July 1 as Global Cues Stay Mixed

Pre-Market Update at 7:46 AM: Indian equity markets are expected to open on a flat note on Wednesday, with mixed global cues influencing sentiment. Asian markets traded unevenly in early deals, while U.S. equities extended gains overnight, supported by sustained buying across major indices.

The GIFT Nifty was trading near 23,976 at around 7:32 am, showing a discount of nearly 28 points versus Nifty futures’ previous close. This suggests early consolidation with a slightly positive bias for Indian markets.

The first trading session of July brings seasonal optimism for traders. Historical data since 2009 shows that the Nifty 50 has delivered an average return of around 2.22 per cent in July, making it one of the stronger months for the index. The index has closed in the green nearly 70.6 per cent of the time during July sessions. It also recorded a five-year winning streak from 2020 to 2024 before ending last year with a decline of 2.93 per cent.

The Nifty 50 has fallen 8.5 per cent in H1CY26, marking its weakest January–June performance since 2020. Despite the weakness in Large-Cap indices, broader markets showed resilience, with around 27 Small-Cap stocks more than doubling investor wealth during the same period. However, key large-cap names such as Infosys, ITC, and HDFC Bank underperformed, while BHEL and Hitachi Energy India continued strong multi-year uptrends.

Investor sentiment remains sensitive to geopolitical developments. Although the U.S. and Iran signed a memorandum of understanding on June 17 to ease ongoing conflict, renewed tensions over the weekend have raised doubts about progress. Reports also suggest limited high-level engagement between U.S. and Iranian officials in Doha.

The Japanese yen weakened to a 40-year low, hitting 162.28 per U.S. dollar, intensifying speculation about possible intervention by Japanese authorities as currency volatility rises globally.

Gold remained firm above USD 4,000 per ounce, with spot prices at USD 4,013.75. Silver gained 1.2 per cent to USD 58.98 per ounce. Despite geopolitical tensions, gold has declined around 24 per cent since the Iran conflict began in late February, breaking below key technical levels.

Oil prices edged higher on renewed geopolitical concerns. Brent crude rose 0.69 per cent to USD 73.45 per barrel, while WTI gained 0.91 per cent to USD 70.13 per barrel after reports suggested stalled U.S.–Iran talks.

The U.S. dollar strengthened further, pushing the yen to its weakest level since 1986. The dollar index gains were supported by expectations of additional Federal Reserve tightening, strong economic data, and inflation resilience.

Put-Call Ratio (PCR) stood at 0.88, with strong put open interest at the 23,400 strike and strong call open interest at the 24,000 strike. Options data suggests a key range between 23,400 and 24,000, with resistance pressure building near the upper end.

The Nifty 50 has seen two consecutive sessions of decline, indicating profit booking and mild loss of momentum, but it continues to trade above its 20-day and 50-day exponential moving averages, keeping the broader trend intact. Key support is placed at 23,800, while resistance is seen in the 24,200–24,500 range. A sustained break below 23,800 may trigger a decline toward 23,700–23,650 levels, while holding above this zone may lead to consolidation with a positive bias.

No stocks are under the F&O ban for July 1.

On June 30, FIIs were net sellers at Rs 2,556.75 crore while DIIs were net buyers at Rs 6,842.34 crore, indicating continued domestic support in the market.

On Tuesday, Indian equities ended lower with Sensex falling 249.70 points (0.33 per cent) to 76,478.67 and Nifty 50 declining 80.50 points (0.34 per cent) to 23,865.75.

U.S. markets closed higher, with Dow Jones rising 0.26 per cent to 52,319.20, S&P 500 gaining 0.79 per cent to 7,499.36, and Nasdaq jumping 1.52 per cent to 26,213.72, led by strength in technology stocks.

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

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