Indian equity markets are anticipating a rough start to the trading week on Monday, June 8, following a notable decline in GIFT Nifty futures. The NSE International Exchange's Nifty futures plunged 356 points, or 1.52%, to 23,091, signaling a potential sharp gap-down opening for domestic indices.
This expected weakness comes after a significant overnight sell-off on Wall Street, where major indices experienced their largest single-day falls this year. The Nasdaq Composite dropped 4.18%, the S&P 500 fell 2.64%, and the Dow Jones Industrial Average declined 1.35%.
Global Headwinds Fuel Investor Anxiety
The global risk appetite deteriorated after a stronger-than-expected U.S. jobs report. This report reinforced concerns that the Federal Reserve might maintain higher interest rates for an extended period, dampening investor sentiment.
“Investor sentiment deteriorated following a stronger-than-expected U.S. jobs report, which reinforced expectations that the Federal Reserve may keep interest rates higher for longer,” noted Ponmudi R, CEO - Enrich Money.
Geopolitical tensions in West Asia and their impact on crude oil prices also continued to weigh on market sentiment, as highlighted by Vinod Nair, Head of Research at Geojit Investments Limited.
Domestic Market Dynamics and RBI Policy
Domestically, Foreign Institutional Investors (FIIs) were aggressive sellers, recording substantial net outflows of approximately Rs 31,114.47 crore during the first week of the month. Conversely, Domestic Institutional Investors (DIIs) provided a buffer with cumulative net inflows totaling Rs 33,933.05 crore, preventing a steeper decline.
The Reserve Bank of India’s (RBI) recent monetary policy outcome also influenced domestic sentiment. The Monetary Policy Committee (MPC) opted to keep the repo rate unchanged at 5.25% and maintained its neutral stance, a decision that was largely anticipated by the market.
Key Levels for Nifty and Sensex
Nifty Outlook
- Critical Support: Analysts point to the 23,150 level as a crucial line of defense. Immediate downside cushion is expected between 23,250 and 23,150.
- Accelerated Selling: A decisive break below 23,150 could intensify selling pressure, potentially pushing the index towards 23,000 and even 22,800.
- Resistance: Immediate resistance is seen in the 23,500–23,550 zone. A sustained breakout above this could trigger a recovery towards 23,750–23,800, with 24,000 acting as a major resistance ceiling.
Sensex Outlook
- Resistance: Immediate resistance for the 30-pack index is identified near the 74,600–74,800 zone, with an overhead resistance band at 75,500–75,800.
- Support: Crucial immediate support is firmly established around the 74,000–73,800 zone.
Analyst Recommendations
Ajit Mishra, SVP, Research, Religare Broking Ltd, described the current market state as a phase of "cautious consolidation amid strong domestic macro and global headwinds."
Vinod Nair suggested that with earnings season concluded, range-bound movement is likely to persist as investors await clearer signals on growth momentum and external stability.
Mishra advised market participants to adopt a selective approach. He recommended focusing on "companies with strong earnings visibility, healthy balance sheets, and exposure to domestic demand themes," while also emphasizing prudent risk management due to elevated global policy signals.