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Indian benchmark indices, Sensex and Nifty, are expected to open lower on Monday, reacting to rising geopolitical tensions in West Asia following US and Israeli actions against Iran.
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NIHARIKA KULKARNI
Indian benchmark indices, Sensex and Nifty, are likely to see West Asia heat, at least in the opening session, as analysts weigh the consequences of US/Israe-Iran tension. Gift Nifty at 25,005 signals that Nifty could see a gap down opening of 100 points. However, analysts say the strength of the domestic economy and the RBI’s recent moves to enhance liquidity in the system will limit the downfall. According to experts, the market will remain in consolidation mode further before pursuing a rally.
Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India, said: India’s economy continues to stand out as one of the world’s fastest growing and most resilient, backed by strong macroeconomic fundamentals and a vibrant policy landscape. The nation’s regulatory institutions, led by SEBI, have consistently pursued reforms aimed at deepening market participation, enhancing transparency, and simplifying compliance to attract global capital, he said.
After a big buy figure of Rs 19860 crores in May, FIIs became less confident in June, with bouts of selling and buying. The net FII activity from June till the 20th is a selling figure of Rs 4192 crore (NSDL). “Given the global uncertainty dominated by geopolitics, particularly the war in West Asia, FPI activity will be in response to the geopolitical developments,” cautionedDr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
According to Madhavi Arora, Economist at Emkay Global Research, The June MPC meeting minutes clarified the triple surprise of frontloaded easing, CRR cut and stance reversion. Members were unanimous in citing the lower inflation forecast for opening the monetary policy space to act, while the argument for frontloading was underpinned by the need to support growth amid global uncertainty and hasten the transmission of easing. The stance reversion to ‘neutral’ was to avoid unnecessary market assumptions of further heavy easing while retaining the flexibility to act if macro dynamics evolve. Given the likely impending reset in domestic macro-dynamics, the RBI may ease rates once more by the end of end-CY25, she added.
Vipul Bhowar, Senior Director – Listed Investments, Waterfield Advisors, said: “The trend of Foreign Portfolio Investment (FPI) experienced a reversal in April and demonstrated considerable strengthening in May, characterised by positive inflows. The inflows recorded in May represented the highest level observed in eight months, signifying a resurgence of interest from foreign investors in the Indian markets. Nonetheless, geopolitical tensions, including the conflict between Israel and Iran, alongside global uncertainties, fostered a cautiously optimistic pattern in June. Enhancing domestic fundamentals and a favourable long-term growth outlook indicate that, should global conditions stabilise, India may experience more sustained and stable foreign portfolio investment inflows in the future.“
Meanwhile, Asian stocks are down in early deals on Monday due to escalation of tension in Iran.
According to derivative analysts, F&O data presents a mixed trend with a cautious outlook. The options data paints a constructive picture, with aggressive put writing near current price levels — a signal of confidence among traders. Simultaneously, call writing has picked up at higher strikes, hinting at a mildly cautious yet bullish bias, with some room for sideways consolidation, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities
According to him, the Put-Call Ratio (PCR) has climbed from 0.95 to 1.18, reflecting a shift toward bullish positioning and confirming underlying demand at dips.
Notwithstanding the Iran-Israel conflict, India VIX eased by 4.09%, settling at 13.67 — remaining comfortably below the critical 15 threshold despite global geopolitical headwinds. “The cooling in volatility suggests fading fear and growing investor confidence, which typically supports the continuation of an upward trend,” said Dhameja.
Published on June 23, 2025
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