Pre-Market Report: GIFT Nifty Signals Strong Gap-Up as US Rate Hike Fears Recede

Global Market Cues

The global market setup for Friday is a blend of record-breaking performance and sector-specific rotation. In the US, the Dow Jones Industrial Average surged 1.14% to a fresh record high of 52,900.07, while the Nasdaq Composite slipped 0.8% as investors continued to rotate out of high-flying semiconductor stocks. The S&P 500 remained largely flat.

The primary catalyst was the US June non-farm payrolls report, which showed the economy added only 57,000 jobs—significantly below the 110,000 forecast. This cooling of the labor market has led traders to lower the probability of a September rate hike. In Asia, markets showed a mixed but recovering trend on Friday morning; Japan's Nikkei 225 fluctuated after early tech selling, while South Korea's Kospi gained 1.4%.

On the commodity front:

• Gold: Prices surged past the $4,100 per ounce mark, supported by a weakening US dollar and falling Treasury yields.
• Crude Oil: Brent crude hovered near $71.80 per barrel, while WTI traded around $68.60, as supply concerns eased following positive progress in US-Iran negotiations regarding the Strait of Hormuz.

GIFT Nifty and Domestic Cues

GIFT Nifty is currently trading at approximately 24,448, suggesting a gap-up opening of nearly 180 points for the Nifty 50. This follows a strong Thursday session where the Nifty closed above the 24,150 resistance zone, led by a 4.6% rally in the IT sector.

Domestic institutional activity remains a pillar of support:

• FII & DII Activity: On July 2, Domestic Institutional Investors (DIIs) were net buyers to the tune of ₹1,784.40 crore, while Foreign Institutional Investors (FIIs) were marginal net sellers, offloading shares worth ₹311.82 crore.
• Technical Levels: Nifty 50 faces immediate resistance at 24,250, with a sustained move above this level potentially opening doors to 24,400. On the downside, 24,050 acts as a crucial support.
• Volatility: The India VIX has dropped to a multi-month low of 12.29, indicating low market fear.

Key Stocks in Focus

Several companies are expected to see significant price action today based on overnight developments and quarterly updates:

• Marico: The company reported strong double-digit volume growth in its India business for Q1, with Parachute Coconut Oil performing exceptionally well.
• Mphasis: The board has re-appointed Nitin Rakesh as CEO and MD for a further five-year term.
• Varun Beverages: Its South African subsidiary, Bevco, is set to merge with Twizza, expanding its regional footprint.
• Bajaj Finance & ICICI Bank: Both stocks remain in focus following strong AUM growth reports and record-high closes in the previous session.

Key Events to Watch Today

Investors should keep an eye on the following events that could influence market liquidity and direction:

• US Market Holiday: US markets will be closed today, July 3, in observance of Independence Day, which may lead to lower global trading volumes in the afternoon session.
• IPO Activity: IC Electricals' IPO opens for subscription today, while Knack Packaging’s IPO enters its final day.
• Geopolitical Updates: Continued monitoring of the US-Iran diplomatic talks as any breakthrough could further soften crude oil prices.

TAGS: Pre-Market, Stock Market, Nifty, Sensex, Market Update

Tags: Pre-Market Stock Market Nifty Sensex Market Update