Indian Market Set for Flat Open as Risk Sentiment Improves

Indian equities are likely to open flat on Monday, with Gift Nifty pointing to a slip of about 25 points at the open for Nifty. The improvement in US-Iran tensions and the return of foreign portfolio investors are supporting consolidation, analysts said.

Ponmudi R, CEO of Enrich Money, said Indian equities are expected to open on a steady note, supported by positive global cues, subdued crude oil prices and improving risk sentiment.

“Geopolitical concerns have continued to recede as the U.S.–Iran situation remains stable, with diplomatic engagement progressing and no major disruptions reported. The easing of tensions has reduced concerns over energy supply risks in the Middle East, underpinning investor confidence across global markets,” he added.

Asian stocks Nikkei and Kospi were down in early deals on Monday.

Santosh Meena, Head of Research at Swastika Investmart Ltd, said the focus will shift toward key domestic and global developments that could determine market direction. Domestically, investor attention will centre on the commencement of the Q1 FY27 earnings season from July 9. The initial batch of corporate earnings and management commentary is expected to provide insights into demand conditions, margin trends, and earnings visibility.

Market participants will also monitor foreign institutional investor (FII) and domestic institutional investor (DII) flows, which continue to play a role in near-term market momentum. The progress of the southwest monsoon and kharif sowing will remain important indicators for rural demand, inflation expectations, and overall economic growth.

Movements in the rupee against the US dollar and fluctuations in crude oil prices will also be tracked, given their implications for inflation, corporate profitability, and investor sentiment.

On the global front, markets will closely monitor the July 9 deadline for the proposed India-US trade agreement. Any breakthrough or delay in negotiations could significantly influence investor sentiment, particularly in export-oriented sectors, Meena said. He added that while the underlying trend for Indian equities remains positive, markets are likely to remain driven by earnings expectations, institutional flows, technical levels, and evolving domestic and global macroeconomic developments in the week ahead.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said FPI outflows are likely to decline. The crash in crude prices to below $72 and the big inflows expected from FCNR (B) deposits will bring India’s balance-of-payments deficit significantly down.