Indian stock markets are expected to open on a cautious note this Monday, influenced by a confluence of global and domestic factors. While GIFT Nifty Futures showed a marginal gain, it hints at a subdued start for the domestic indices, reflecting widespread investor apprehension.
Cautious Start for Indian Markets
GIFT Nifty Futures on the NSE International Exchange were up 83.40 points, or 0.35 percent, trading at 23650.50. Despite this uptick, the overall sentiment points towards a cautious opening for the Indian market today. Renewed geopolitical rhetoric from the US is significantly impacting global investor confidence, contributing to the domestic market's subdued outlook.
Adding to the pressure are surging crude oil prices and continued selling by Foreign Institutional Investors (FIIs), which are further weakening the Indian rupee. This combination of factors is keeping market sentiment under considerable strain in early trade, according to market analysts.
Global Market Overview
Asian share markets experienced declines on Monday, primarily driven by fresh drone attacks in the Gulf region, which pushed up oil prices and bond yields. Both Japan's Nikkei and Hong Kong's Hang Seng indices dropped by approximately one percent each.
On Friday, US stocks retreated from their recent artificial-intelligence-fueled record highs. Spiking crude prices ignited global inflation fears, leading to significant drops across major indices. The Dow Jones Industrial Average fell 537.29 points (1.07%) to 49,526.17, the S&P 500 lost 92.74 points (1.24%) to 7,408.50, and the Nasdaq Composite dropped 410.08 points (1.54%) to 26,225.15.
Commodities and Currencies
In forex markets, the US dollar benefited from risk aversion, solidifying its position as the world's most liquid currency. The dollar index was slightly firmer, standing at 99.393.
Crude oil prices saw a notable increase, with Brent crude trading up 1.2 percent at $110.63 a barrel, and US crude climbing 1 percent to $106.42 a barrel. Gold, typically a safe haven, remained flat at $4,540 an ounce, receiving little support despite the market uncertainties.
Investor Flows and Expert Commentary
Provisional data from the NSE revealed that FPIs turned net buyers of domestic stocks by Rs 1,329.17 crore on Friday. Conversely, Domestic Institutional Investors (DIIs) were net sellers of Indian equities, offloading shares worth Rs 1,958.82 crore. Earlier in May 2026, FPIs had pulled out a substantial Rs 27,048 crore from Indian equities.
Experts advise caution. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that Indian equities are likely to trade within a broader range due to elevated crude oil prices, persistent rupee weakness, and continued volatility in foreign flows. He anticipates markets will increasingly focus on global macroeconomic developments.
Ajit Mishra, SVP of Research at Religare Broking, suggested that participants maintain a cautious and selective approach given the current environment. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted that the ongoing trend of AI companies attracting global capital flows is contributing to capital flight from countries like India, which are perceived as AI laggards.
Technical Outlook: Nifty, Sensex, Bank Nifty
From a technical perspective, the Nifty50 formed a bearish candle on weekly charts and is currently trading below short-term moving averages, indicating a negative short-term outlook. Amol Athawale, VP of Technical Research at Kotak Securities, suggests a pullback could continue if Nifty sustains above 23,500/75,000.
Key resistance for Nifty is at 23,800/75,800, with a decisive move above potentially leading to 24,000–24,100/77,000–77,300. Downside risk exists if the index breaks below 23,500/75,000, potentially retesting 23,350/74,500. Immediate resistance levels for Nifty are 24,000 and 24,250, with support at 23,250 and 23,000. A breach of 23,000 could trigger further selling pressure.
For Sensex, Choice Broking noted that momentum indicators like RSI show recovery from oversold territory, suggesting an attempt to resume its broader uptrend. Immediate support is near 74,600-74,800, with stronger support at 74,500. Resistance is seen near 76,200-76,000, and a breakout could open the path towards 76,500.
Nifty Bank faced stiff resistance and profit booking at higher levels. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, identified immediate support in the 53300-53200 zone. A move below this could extend weakness towards 52800 and 52400.
Bajaj Broking observed that Bank Nifty formed a bearish candlestick pattern on its weekly chart, signaling a corrective bias. The bias remains down below the 54,400-54,600 breakdown area, with potential downside towards 52,700-52,400. A move above 54,400-54,600 would signal a resumption of the uptrend towards 56,000-56,500.
Traders are advised to maintain discipline and implement strict stop-loss strategies amidst ongoing volatility, according to Choice Broking.