Indian stock markets are poised for an interesting trading session on June 4, 2025, following a turbulent day marked by a sharp decline in the previous session. Both the Nifty 50 and the Sensex closed significantly lower on Tuesday, June 3, 2025, due to weak global cues, concerns about stretched valuations, and foreign capital outflows. However, early indications suggest a potential recovery, with GIFT Nifty futures trading higher, hinting at a positive opening.
Key Factors Influencing Market Sentiment
Several factors are expected to influence the direction of the Indian stock market on June 4, 2025:
- Global Cues: Mixed global signals are creating uncertainty. While European markets are trading flat to negative, US futures are in the red, indicating potential pressure on Indian equities. Asian markets, however, are showing some gains, tracking overnight rallies on Wall Street.
- Domestic Cues: The Gift Nifty is signaling a soft opening. The Nifty 50 and Sensex closed lower by 0.70% and 0.78% respectively in the previous session.
- RBI Monetary Policy Committee (MPC) Meeting: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) commenced its meeting on June 4, 2025. Market participants are keenly awaiting the outcome of this meeting, with many expecting a repo rate cut. The policy decision is scheduled for announcement on June 6, 2025.
- Foreign Portfolio Investor (FPI) Activity: Foreign portfolio investors have been net sellers of Indian equities, contributing to the recent market decline. FPIs have recorded their largest quarterly outflow from Indian government bonds since their inclusion in global bond indices, which is attributed to the narrowing yield gap between Indian and U.S. 10-year bonds.
- Technical Analysis:
- Nifty 50: Technical analysis suggests that the Nifty 50 formed a bear candle, signaling profit booking at higher levels. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, believes that further weakness could lead to a decline towards the 24,400-24,300 levels, while any upside could face resistance around 24,800. Dr. Praveen Dwarakanath, Vice President of Hedged.in, noted strong support at the 24,500 level, with consolidation expected between 24,500 and 25,150.
- Sensex: The Sensex slipped below the 20-day SMA (Simple Moving Average) at 81,300, forming a long bearish candle. Shrikant Chouhan, Head of Equity Research at Kotak Securities, suggests that a fresh sell-off is possible if the 80,500 level is breached, potentially leading to a decline towards 80,100-80,000. On the upside, a move above 81,000 could trigger a pullback rally towards 81,300, with further upside potentially lifting the Sensex to 81,500.
Expert Recommendations
Despite the recent market volatility, some experts are identifying buying opportunities in specific stocks. RCF (Rashtriya Chemicals & Fertilizers) is presented as a technically strong buying opportunity, with traders advised to monitor price action closely near the ₹165 level. BSE Ltd. is also recommended as a buy, with a target price of ₹2,986 and a stop loss at ₹2,668. Federal Bank is another stock to consider for a buy.
Overall Outlook
The Indian stock market is expected to exhibit volatility on June 4, 2025. While positive global cues and GIFT Nifty trends suggest a potentially higher opening, concerns about domestic weakness, FPI outflows, and global trade tensions could weigh on market sentiment. The RBI's monetary policy decision will be a key factor influencing market direction in the coming days. Investors are advised to remain cautious and closely monitor market developments. Technical levels suggest key support and resistance points for both the Nifty 50 and the Sensex, which could guide trading strategies.
