The stock market is expected to open lower on Friday, June 20, following weak signals from global markets. Rising tension between Israel and Iran has made investors nervous, and this could weigh on early trade in both Sensex and Nifty.
As of 8:00 am, Gift Nifty futures were trading at 24,800. This suggests that the Nifty50 may open near its previous closing level of 24,793.25. On Thursday, both Sensex and Nifty ended almost flat, while broader market indices saw a dip as traders became cautious due to global uncertainty.
Asian markets also opened weak after news reports claimed that Israel had attacked Iranian nuclear sites. In response, Iran is said to have launched missile and drone strikes. This back-and-forth has made global investors worried about the risk of a larger conflict in the region.
Adding to this, there is also uncertainty around how the U.S. government may respond to the situation. The White House stated that President Donald Trump would decide within two weeks whether the U.S. would provide military support to Israel. Wall Street remained closed on Thursday, giving little help in terms of overnight cues.
Despite the weak global mood, domestic institutional investors (DIIs) continued to show confidence. On Thursday, they remained net buyers of Indian stocks for the 23rd session in a row. Their steady buying has provided some cushion against foreign investor selling and added liquidity to the market.
VLA Ambala, Sebi Registered Research Analyst and Co-Founder of Stock Market Today, said the Nifty showed signs of uncertainty during Thursday’s session. “The benchmark Nifty formed a Doji high wave pattern on the daily chart, which is a sign that the market is undecided due to many global issues,” she explained.
Ambala also pointed out that the U.S. Federal Reserve, like the RBI, did not change interest rates recently. “While both the RBI and the Indian government are positive about trade and the rupee’s performance, high inflation and fears of a global slowdown could affect market gains,” she said.
She further warned that investors should be careful in the coming sessions. “It may be wise to go underweight on mid-cap stocks, as we might see a fall of 3% to 5% from current levels,” Ambala noted.
Market volatility has remained moderate, with the India VIX at 14.26. However, Ambala said that volatility is likely to rise in the coming sessions. “Based on current data, Nifty could find support between 24,640 and 24,500. On the higher side, resistance may come in near 24,860 and 24,950,” she added.
With global events continuing to unfold and uncertainty building up, traders are expected to remain cautious in Friday’s session.
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(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)