The Indian stock market is expected to exhibit mixed trends on June 16, 2025, amid escalating geopolitical tensions stemming from the Israel-Iran war. Global cues suggest a cautious sentiment, and early indications point towards a potentially positive start for Indian benchmark indices.
Global Market Indicators:
- Mixed Asian Markets: Asian markets display a mixed performance, with Japan's Nikkei and Korea's Kospi showing gains, while Hong Kong's Hang Seng and China's Shanghai Composite are slightly down.
- Positive Start Indicated: Gift Nifty futures are trading with a premium, suggesting a positive opening for the Indian market.
Impact of Israel-Iran Conflict:
- Heightened Volatility: The ongoing conflict between Israel and Iran has triggered increased volatility in global markets, including India.
- Oil Price Surge: Brent crude oil prices have surged, raising concerns about inflation and trade deficits for oil-import-dependent countries like India.
- Rupee Depreciation: The Indian rupee has weakened against the US dollar due to rising oil prices and foreign fund outflows.
Friday's Market Performance (June 13, 2025):
- Sharp Decline: Indian stock markets declined sharply, with the Sensex falling nearly 500 points and the Nifty 50 closing lower.
- FII Outflows: Foreign Institutional Investors (FIIs) pulled out a significant amount of funds, adding to the market pressure.
- Defensive Stocks Rally: Shares of Indian defense companies rose sharply, reflecting investor interest amid geopolitical instability.
Key Factors to Watch:
- Israel-Iran News: Developments surrounding the Israel-Iran conflict will likely be a major driver for market sentiment.
- US Federal Reserve (FOMC) Meeting: The US FOMC meeting will be closely monitored for insights on potential rate cuts.
- Crude Oil Prices: The trajectory of crude oil prices will be crucial, as elevated prices can negatively impact India's trade deficit and inflation.
- FII Activity: The flow of foreign funds will continue to influence market direction.
- Monsoon Progress: The progress of the monsoon season in India will be a key factor for the domestic economy and market sentiment.
Expert Opinions and Analysis:
- Risk-Off Mode: Geojit Investments Limited suggests that the market will be in a risk-off mode in the near term due to the conflict.
- Buying Opportunity: Axis Securities believes that market corrections driven by geopolitical concerns could present buying opportunities.
- Support Levels: Technical analysis indicates strong support levels for Nifty around 24,500 and Bank Nifty near 55,000.
- Market Volatility: Experts anticipate continued market volatility amid geopolitical uncertainty and central bank meetings.
- Positive Start: Trends on Gift Nifty indicate a positive start for the Indian benchmark index.
Stock Recommendations:
- Analysts have suggested stocks to buy, including Hindustan Aeronautics (HAL), Tech Mahindra, and Muthoot Finance.
- Other stock picks include RPG Life Sciences Ltd., Goodluck India Ltd, Steel Authority of India Ltd., State Bank of India, Paras Defence and Space Technologies Ltd., Apollo Micro Systems Ltd., and Tilaknagar Industries Ltd.
Overall Outlook:
The Indian stock market is expected to remain sensitive to developments in the Israel-Iran conflict, global economic cues, and domestic factors such as monsoon progress and inflation data. While initial trends suggest a positive start on June 16, investors are advised to remain cautious and monitor key indicators to navigate market volatility.
