The Indian stock market is facing a complex interplay of global cues, with Gift Nifty, escalating tensions between Israel and Iran, and China's interest rate decisions all contributing to overnight shifts. Here's a breakdown of eight key factors influencing the market:

1. Gift Nifty Signals Muted Opening:

Gift Nifty, formerly known as SGX Nifty, serves as an early indicator of how the Indian market might open. On June 20, 2025, Gift Nifty was trading around the 24,793 level, a discount of nearly 10 points from the Nifty futures' previous close. This suggests a potentially muted start for the Indian stock market indices. Gift Nifty provides a global trading window for Indian equities, accessible to international investors and bridging the time gap between global and Indian markets.

2. Israel-Iran War Concerns:

Escalating tensions between Israel and Iran are casting a shadow over global markets. The conflict has the potential to disrupt oil supplies, sending prices soaring and fueling inflation. Attacks on Iranian oil facilities have already intensified market anxieties. Investors are closely monitoring the situation, as a further escalation could lead to a sustained rise in oil prices and fresh volatility in the markets. Some analysts anticipate crude oil prices potentially exceeding USD 100 per barrel if tensions worsen. A major risk would be a blockade of the Strait of Hormuz, a critical waterway for oil transportation.

3. China's Interest Rate Decision:

The People's Bank of China (PBoC) has decided to hold its one-year loan prime rate unchanged at 3% and the five-year rate at 3.5%, aligning with market expectations. China's monetary policy decisions can have a significant impact on global financial markets. Interest rate cuts and monetary policy easing by the Central Bank of China are important steps to maintain national economic stability amid growing external pressures.

4. Asian Markets Mixed:

Asian markets traded mostly higher on Friday, June 20, 2025, after China data and as investors assessed escalating Israel-Iran tensions. Japan's Nikkei 225 rose 0.13%, while the Topix index was flat. South Korea's Kospi index gained 0.51%, while the Kosdaq rose 0.41%. Hong Kong's Hang Seng index futures indicated a weaker open.

5. US Market Holiday:

The US stock market was closed on Thursday for the Juneteenth holiday. However, US stock futures traded lower ahead of Friday's session. Dow Jones Industrial Average futures fell 154 points, or 0.3%, Nasdaq 100 futures declined 0.2%, while S&P 500 futures fell 0.2%.

6. Domestic Market Performance:

On Thursday, the Indian stock market ended with minor losses, with the benchmark Nifty 50 slipping below the 24,800 level. The Sensex fell 82.79 points, or 0.10%, to close at 81,361.87, while the Nifty 50 settled 18.80 points, or 0.08%, lower at 24,793.25.

7. Expert Views:

Market experts are advising caution, citing geopolitical tensions and gradual profit booking across sectors. They recommend closely monitoring positions until there is further clarity in the market. Concerns remain about rising crude prices, with potential deterioration if crude makes a sustained move above the $80 mark.

8. Institutional Activity:

Foreign and domestic institutional investors continued their buying streak in Indian equities. Foreign institutional investors (FIIs) made net purchases worth Rs 890.93 crore, while domestic institutional investors (DIIs) remained stronger participants with net buying of Rs 1,091.34 crore.