Pre-Market Update: Nifty, Sensex Likely to Open Weak on June 12 Amid U.S.-Iran Tensions, Crude Oil Surge Persistent FII Selling

Pre-Market Update at 7:42 AM: Indian benchmark indices, Sensex and Nifty 50, are expected to open cautiously on Thursday, June 12, amid weak global market cues and rising geopolitical tensions in the Middle East. Investor sentiment remained under pressure following the latest escalation in the conflict between the U.S. and Iran, while surging crude oil prices added to concerns over inflation and global economic growth.

Gift Nifty was trading near the 23,115 mark, at a discount of around 25 points to the previous close of Nifty futures, indicating a weak start for domestic equities.

On Wednesday, Indian markets ended on a mixed note after witnessing sharp Intraday volatility. The Sensex gained 64.42 points, or 0.09 per cent, to close at 73,983.18. However, the Nifty 50 slipped 27.15 points, or 0.12 per cent, to settle at 23,214.95, giving up most of its intraday gains by the close.

Global cues remained negative as major Asian markets traded lower, while Wall Street ended sharply in the red overnight. U.S. equities declined amid renewed geopolitical concerns and continued weakness in technology stocks. The Dow Jones Industrial Average fell 953.33 points, or 1.87 per cent, to 49,918.78. The S&P 500 dropped 119.66 points, or 1.62 per cent, to 7,266.99, while the Nasdaq Composite lost 509.32 points, or 1.98 per cent, to close at 25,169.50.

The U.S.-Iran conflict remains the primary concern for global markets. The United States launched fresh strikes on Iran, prompting Tehran to warn that vessels passing through the Strait of Hormuz could become targets. Reports of explosions near the strategic waterway have heightened fears of supply disruptions in global energy markets.

Inflation concerns also resurfaced after U.S. consumer inflation accelerated in May. The Consumer Price Index rose 4.2 per cent year-on-year compared with 3.8 per cent in April, reinforcing expectations that interest rates could remain elevated for longer. Treasury yields moved higher, with the benchmark 10-year yield rising to 4.548 per cent and the 30-year bond yield reaching 5.0282 per cent.

Crude oil prices surged after reports that Iran had declared the Strait of Hormuz closed following fresh U.S. strikes. Brent crude futures climbed 2.47 per cent to USD 95.40 per barrel, while WTI crude rose 2.89 per cent to USD 92.63 per barrel. Higher oil prices could weigh on India’s inflation outlook and increase pressure on import costs.

Meanwhile, gold prices remained under pressure, with spot gold slipping 0.2 per cent to USD 4,063.87 per ounce, while spot silver fell 0.9 per cent to USD 63.15 per ounce. The U.S. dollar index remained largely stable around 100.01.

From a derivatives perspective, the Put-Call Ratio for the June series stood at 0.82. Significant put open interest was concentrated at the 23,200 strike, while call open interest remained heavy between the 23,300 and 24,500 strike levels, with notable additions at the 23,400 strike.

Technically, Nifty 50 has immediate support in the 23,000–23,100 zone. A decisive breach below this range could drag the index towards 22,700. On the upside, the index needs to reclaim and sustain above its 20-day moving average near 23,554 to regain bullish momentum and target 23,700. For the Sensex, 73,490 remains a crucial support level. Sustaining above this mark could lead to a recovery towards the 74,550–74,600 zone, while a breakdown may trigger further weakness towards 73,080.

Among stock-specific developments, Lenskart Solutions will remain in focus as Platinum Jasmine, owned by the Abu Dhabi Investment Authority, is expected to sell a 2.3 per cent stake through a block deal worth Rs 1,944 crore at a floor price of Rs 486 per share. Vascon Engineers received a Letter of Intent worth Rs 347.43 crore from CPWD for the redevelopment of RBI quarters in Guwahati. Zee Entertainment Enterprises approved plans to raise a minimum of Rs 2,300 crore through one or more tranches for strategic and business initiatives.

Deccan Gold Mines signed an agreement to acquire up to a 51 per cent stake in Spain's Logrosan TunGSTen Project through an investment of EUR 1.76 million. PPAP Automotive entered into a partnership with Hutchinson to manufacture advanced body sealing systems for passenger vehicles in India. Power Grid Corporation of India approved a SCADA system upgradation project worth Rs 485.04 crore, sanctioned a JPY 80 billion unsecured term loan facility, and appointed a new Chief Financial Officer.

In the Banking space, Central Bank of India increased FCNR(B) deposit rates by up to 253 basis points, offering rates of up to 6 per cent for deposits with tenures of three to five years. Punjab National Bank also revised FCNR(B) deposit rates, offering up to 6.10 per cent annually and targeting mobilisation of around USD 2.5 billion under the scheme.

For the June 12 session, Amber Enterprises India and Kaynes Technologies remain under the F&O ban list.

Institutional activity remained mixed on June 10. Foreign Institutional Investors (FIIs) were net sellers of Indian equities worth Rs 2,124.98 crore, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 3,123.95 crore, providing support to the market.

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

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