Sensex, Nifty may see cautious start amid global jitters and Middle East tensions

The stock markets are expected to open on a cautious note on Monday, June 16, amid ongoing tensions in the Middle East, particularly the Israel-Iran conflict, which continues to impact investor sentiment globally.

Early signals from the GIFT Nifty futures point to a slightly positive start for the domestic indices. It was trading at around 24,791, indicating a 65-point premium over the previous close of Nifty futures.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said, "Markets may log gains in early Monday trade, mirroring the uptick in the GIFT Nifty index, but pessimism in other global indices and the subsequent negative factors could weigh on sentiment as trading progresses. With both Israel and Iran refusing to budge from their stance, the resultant rise in crude oil prices could depress investors' sentiment going ahead. Further, FIIs turning net sellers of local equities over the past three sessions would keep investors on the edge, [and] while the US Fed is unlikely to tinker with interest rates in this week's policy meeting, [it] would also add to growing uncertainty."

Last Friday, both the Sensex and the Nifty ended in the red for a second straight session. The Sensex fell 573 points to close at 81,118, while the Nifty50 declined 169 points to end at 24,718.

Over the past week, both benchmarks shed approximately 1.3%, reflecting heightened geopolitical risks. However, the global markets remained largely positive, supported by optimism around developments in the US-China trade talks.

"On the sectoral front, the majority of indices ended in negative territory. Capital Goods (-1.8%), Metals (-1.6%), Realty (-3.7%), FMCG (-1.9%), and Bank Nifty (-1.7%) were among the biggest losers. Conversely, IT (+3.3%), Pharma (+1.2%), and Oil & Gas (+0.3%) sectors posted modest gains," said Shrikant Chouhan, Head of Equity Research, Kotak Securities.

"Among individual stocks, Tech Mahindra surged 5.5%, followed by Wipro (+4.8%) and ONGC (+4.6%). On the downside, Eicher Motors fell 5.1%, Adani Ports declined 4.4%, and Shriram Finance slipped 3.6%," he added