GIFT Nifty Hints at Positive Start After Global Markets Turn Risk-On

Indian markets are expected to open on a strong note on Thursday after global cues improved sharply overnight. A steep decline in crude oil prices, easing geopolitical concerns, and strong gains in US futures have boosted sentiment across equity markets.

Contents

GIFT Nifty Hints at Positive Start After Global Markets Turn Risk-On Here’s What Happened Today and Why Traders Reacted Why Falling Crude Prices Are Important for India Nifty Sees Strong Buying as Bulls Return to Dalal Street Falling Volatility Is Giving More Confidence to Traders What This Means for Investors and Traders Global Developments Will Remain the Key Monitorable Basis of Market Outlook

At around 4:40 pm on May 6, GIFT Nifty was trading near 24,644, up nearly 0.5 percent, indicating a likely gap-up opening for benchmark indices.

The biggest relief for investors came from the sharp correction in oil prices. Brent crude fell below the crucial $100-per-barrel mark and was trading near $97 after dropping more than 9 percent during the session.

For India, which imports most of its crude requirements, the decline comes as a major macro positive.

Top 5 Sectors Benefiting From Crude Falling Below $100

Sector	Impact	Major Stocks	Latest Move
Oil Marketing Companies (OMCs)	Strong Positive	HPCL, BPCL, IOC	HPCL +6.91%, BPCL +5.21%, IOC +4.26%
Banking	Positive	SBI, HDFC Bank, ICICI Bank	Bank Nifty gained around 1.6%–2.4%
Aviation	Strong Positive	IndiGo, SpiceJet	Airline stocks gained on lower ATF costs
Auto	Positive	Maruti Suzuki, M&M, Bajaj Auto	Auto stocks moved higher on easing fuel concerns
Paints	Strong Positive	Asian Paints, Berger Paints	Margin outlook improved due to lower crude-linked raw material costs

Market Outlook for Tomorrow

GIFT Nifty near 24,600 signals a likely gap-up opening
Brent crude below $100 has improved market sentiment sharply
Analysts see Nifty support around 24,300–24,100
Immediate upside target remains near 24,500–24,800

Here’s What Happened Today and Why Traders Reacted

The rally in global markets gathered pace after reports suggested that the US and Iran may be moving closer to restarting broader nuclear negotiations.

According to reports, Washington and Tehran are working on a memorandum that could become the framework for detailed talks in the coming weeks. While no final agreement has been reached yet, investors took the development positively as it raised hopes of easing tensions in the Middle East.

That, in turn, lifted sentiment across equity markets.

US futures surged strongly:

Nasdaq 100 futures jumped 1.6 percent
S&P 500 futures gained nearly 1 percent

At the same time:

Brent crude slipped below $100
US bond yields declined
The dollar weakened to its lowest level since February
Bitcoin extended gains for the seventh straight day

The fall in oil prices gave markets another reason to extend the ongoing rally.

Why Falling Crude Prices Are Important for India

Oil prices play a very important role in determining the direction of Indian markets because India imports most of its crude oil requirements.

Whenever crude prices fall sharply:

Inflation concerns ease
Import costs decline
Pressure on the rupee reduces
Corporate margins improve in several sectors

A sharp correction in crude prices provided fresh relief to markets.

This is one reason why sectors such as aviation, paints, auto, and oil marketing companies often rally when crude prices cool off.

Investors also believe softer oil prices could give policymakers more comfort on inflation management, which is supportive for equities in the medium term.

Nifty Sees Strong Buying as Bulls Return to Dalal Street

Indian equities already reacted positively on Wednesday, with benchmark indices posting their biggest single-day gains in nearly three weeks.

The Nifty 50 rose 1.24 percent to close at 24,330.95, while the BSE Sensex climbed 1.22 percent to settle at 77,958.52.

Market participants said the rally was broad-based, with strong participation across banking, auto, and IT stocks.

Banking stocks were among the immediate beneficiaries of the move.

Analysts now believe the market structure has improved considerably after Nifty crossed an important resistance zone around 24,300.

Nilesh Jain, VP and Head of Technical and Derivative Research at Centrum Finverse Ltd, said:

“The markets staged a strong rebound, with Nifty closing above the immediate resistance at 24,300 levels.”

He added that the index has also broken out of a symmetrical triangle pattern on daily charts, which indicates strengthening bullish momentum in the near term.

According to him, Nifty could now move towards the 24,500 level if the momentum continues.

Falling Volatility Is Giving More Confidence to Traders

Another important trigger supporting the rally is the sharp decline in market volatility.

India VIX, commonly known as the fear gauge, dropped nearly 7 percent and slipped below the 17 mark to its lowest level in about a month.

A lower VIX usually signals:

Improving investor confidence
Reduced panic in the market
Better risk appetite among traders

The development has improved investor confidence in the near-term outlook.

Analysts believe this fall in volatility is encouraging traders to take fresh long positions in equities.

Jain noted:

“Continued easing in volatility is likely to further support the ongoing bullish momentum.”

What This Means for Investors and Traders

For Traders

GIFT Nifty indicates a likely gap-up opening
Momentum could remain strong in banking and auto stocks
Lower volatility may support aggressive bullish trades
Nifty could attempt to reclaim 24,500 soon

For Investors

Falling crude prices improve India’s macro outlook
Lower inflation risks may support earnings growth
Global developments remain important for market direction
Positive sentiment could continue if oil prices stay stable

Global Developments Will Remain the Key Monitorable

Even though sentiment has improved sharply, investors are still keeping a close eye on developments surrounding the US-Iran discussions.

Any major breakthrough could further cool oil prices and strengthen global equities. On the other hand, fresh geopolitical tensions may again bring volatility back into the market.

For now, however, the combination of lower crude prices, easing volatility, and improving technical indicators has created a favourable setup for Dalal Street ahead of Thursday’s trading session.