“GLOBAL HEADWINDS INTENSIFY BANK NIFTY HOLDS STRONG WHILE NIFTY REMAINS AT A CROSSROADS”

The first week of June finally passed with lots of headwinds as traders were washed away with high-speed winds. Nifty remained on high-end volatility with Global turmoil & falling Rupee. Though RBI in its recently held Bi-monthly policy, tried to retain the FII’s funds via G-Sec securities to stabilise the Rupee, the headwinds for Indian Equity markets are still unclear. Meanwhile, above expectations US Non-Farm payroll data has created another issue for the US Fed to increase the rates, which has created a sell-off in the US markets.

US markets consistently made ATH, but a profit booking came due to the Non-Farm payroll data, which was way above the earlier estimate, which now shows a possible rate hike by the US-Fed, creating concerns for global equities. Other than these, what’s driving this pressure? Well, it’s the risk of Inflation due to continuous shortage of crude oil,l followed by high chances of severe El Niño arising, ing which may additionally affect the Food inflation in India. India has already posted high WPI data for the month of April, which resulted at 8.30% vs 3.30 MoM. And in May, India has already increased the price of domestic petrol & diesel, followed by ATF almost three times. All these indicate that inflation is not the thing of the imaginative future, but it’s now among us & could become worse if Super El Niño comes effective.

Nifty once again showed slight weakness on weekly charts at 23366.70 with a nominal loss of 0.77% for the week, while Bank Nifty posted a gain of 0.47,% showing signs of strength. Investors / Traders remained indecisive due to uncertainty & continuous market pressure due to FII’s massive selling.

FII’s remained aggressive sellers across the board with massive sell off of almost Rs. 31,114.47 cr. last week, while DII’s remained net buyers with net buying of Rs. 33,933.05 cr. FII’s have now once again turned the tables, where on 23^rd Jan.’26 was the highest at 2.28 Lacs, which eventually came down to as low as 1.03 lac,s but closed the last week net shorts now once again increased to 2.68 lacs contrac. It may now look like a possible bottom formation could come from FII’s.

So far, since the war between US-Iran-Israel begin ithas not only put Global Equities at risk but also other asset classes. But since this war is not likely to end very soon & speculations & exchange of comments are highly likely to remain intact, we expect its major repercussions may now gradually come to affect at least the Equity markets & a gradual up move may soon begin in the entire Indian Equity markets.

For broader markets to ascertain the possible positive momentum, a few key major factors are likely to be considered & are likely to top out soon. So far,we have so many mixed data developments across the board, which has been the reason for volatility in Equities across the globe. Rupee, crude oil, Dollar Index, etc. Let’s dig it out one by one:

1. Rupee: As RBI intervened with dollar swap auction & issuance of G-sec securities to stabilise the Rupee, it recovered towards 94.75 to give a decisive close at 94.9350. We continue to expect the positive flow towards a cooling zone of 93 in a few weeks’ time frame.
2. Dollar Index: It may remain in a consolidation zone near the 98-100$ range.
3. Brent Crude Oil: Brent crude, as earlier anticipated it cooled off towards 89.78 $ per barrel to give a decisive close at 91.37. It completes the first zone of 90$. We continue to expect it to further make lows near 80-85$ per barrel in the June series.
4. FII’s Remained Seller: FII once again remained on the sell side & it doesn’t look like any kind of easing up as of now. Not a good sign. But net index shorts hit higher at 2.68 lacs, a possible cool off could begin in the second half of the June series.

Nifty in first week of June series has been volatile but the Net shorts in Index has risen towards 2.68 lacs at almost 8% now showing signs of possible bottom formation very soon but the possible reversal could be from 22500-22800 & reversal could come from second half of June series & a non stop rally could be a possibility towards 24600-25000 but as of the coming week immediate hurdle lies at 23500-23800 while support remains at 22500-22800 kind of levels. The possible broader support could be from Bank Nifty.

Bank Nifty, on the other hand, shows signs of strength early. Any move above 55000 could give us 56700-58000 kind of levels, while crucial support remains at 53000 kind of levels. The support may continue to come from Private sector banks.

“Nifty IT” may continue to find its crucial support at 26000-27000 kind of levels, while an upmove may get restricted at 31000-32000 as of now.

Brent crude, as earlier anticipated it cooled off towards 89.78 $ per barrel to give a decisive close at 91.37. It completes the first zone of 90$. We continue to expect it to further make lows near 80-85$ per barrel in the June series.

FII’s have been into net sell in 9 months out of 12 in the current Fiscal year 2025-26, creating pressure on the entire market. In the traders/investors community, it has now become a basic question: why are they selling? & When will this selling stop?

Why have FII’s been continuously selling in Indian Markets?

As the geopolitical issues continue to rise, the US-Israel-Iran war leads to a continuous decline in the Rupee, which hit an all-time low of 94.988, followed by inconsistent government policies and taxation in the capital markets & other things. Add on burden on the markets in respect to the STT rate hike, and continuous pressure on the FnO volumes reduction.

In recently launched GDP growth rate of India in Q2 has been 8.20% while it is being projected that it will grow at 7.30% in the Fiscal year 2025-26 while USA has recently shown a GDP growth rate of 4.40% which is furthermore projected to grow at 4.70% so for a Developed economy which is showing nearly 5% of growth lately whereas target country which is still a Developing country with a projected growth rate of 7.60% but its currency is declining on a fast scale why would any institutions go for a Emerging Markets when it can get a growth of nearly 5% in an already developed nation while saving currency devaluation risk. Isn’t it a safer investment for them?

Well, of course, yes, this could have been a major reason for FII’s to relentlessly sell into the Indian Equity markets.

It has been more than 18 months now, starting from October 202,4 when Indian markets have consistently remained under pressure & each time, some new news item comes to put additional pressure on the domestic equity markets.

We clearly mentioned earlier that Nifty’s pressure only resembles the pressure of political will rather than a fundamental one. FII’s selling has kept its pressure intact on the Indian domestic Equity markets, as it went lower last month, the realisation came forward & now the Indian markets’ growth story rises & the politically backed selling with pressure from the Trump administration to diminish the Indian markets & create an artificial pressure to put an end to the Indo-Russia friendship remains untouched.

India remained on the higher ground on GDP data front where it achieved a milestone with historic growth rate of 7.80% in Q1, 8.20% in Q2 & 7.80% in Q3 of FY 25-26 completely mocking Trump’s “Dead Economy” jibe at its face where India remained on the Top-notch developing economy set for a target of $25 Trillion economy by 2047 on track. However, the chairman of Reliance Industries Limited, Mr Mukesh Ambani, said in its latest AGM last week that India has the capacity to achieve 10% GDP growth annually, which once again has set another long-lasting futuristic goal for the entire economy.

FII & DII’s monthly data so far in the FY 2026-27 have been interesting, where FII’s bought in a few months initially, then abstained from buying or remained on the sell side, while DII’s remained the biggest supporter of the broader markets. The data mentioned below:

Brent crude as earlier anticipated it cooled off towards 89.78 $ per barrel to give a decisive close at 91.37$ it completed out first zone of 90$ we continue to expect it to further make lows near 80-85$ per barrel in the June series.

The Indian Equity markets have gained many recent news items, where most of the news items are mentioned below:

• Rupee may continue to cool off towards 93.
• Dollar Index may remain in a consolidation mode within the range of 98-100.
• Brent crude, as earlier anticipated it cooled off towards 89.78 $ per barrel to give a decisive close at 91.37$ it completed out first zone of 90$ we continue to expect it to further make lows near to 80-85$ per barrel in the June series.

On the other side, FII’s net longs are now near to 8% & a recovery is possible towards 17% followed by 27% till the coming weekend, which continuously signifies & now support could be within the range of 22500-22800 in Nifty.

In the wholesome broader markets, we witnessed some key events & their outcomes last week, which are described as follows:

Domestic News:

1. The government plans to offer E85 fuel (85% ethanol blend) at a discount of around ₹20 per litre compared to petrol.
2. The government has extended the tenure of RBI Deputy Governor Swaminathan Janakiraman by two years.
3. India’s tyre exports reached a record ₹27,312 crore in FY26 despite global supply chain disruptions. Maharashtra signed fresh investment agreements worth ₹4,080 crore to strengthen its electronics manufacturing and logistics ecosystem.
4. India and the United States are expected to implement the first tranche of their bilateral trade agreement by mid-July
5. India’s GDP grew 7.8% year-on-year in Q4, matching the previous quarter’s growth rate and exceeding market expectations of 7.2%
6. India’s foreign exchange reserves rose to USD 682.32 billion, up from USD 681.38 billion in the previous week
7. The RBI has proposed allowing banks to offer differential interest rates on domestic and non-resident rupee bulk deposits
8. India’s FDI equity inflows increased by about 18% year-on-year to $58.84 billion in FY26, with inflows from the United States more than doubling during the period
9. Goldman Sachs has acquired about 1.13 crore shares of Billionbrains Garage Ventures (Groww’s parent company) for roughly ₹210 crore through a block deal
10. RBI has offered a concessional forex swap facility for PSU overseas borrowings until September 30 and eased investment limits to attract foreign capital
11. The RBI has increased the Overseas Portfolio Investment (OPI) limit for individual resident investors in Indian listed companies to 24% from 10%
12. India is planning a major defence procurement of over $2 billion worth of military drones from domestic companies, marking its largest-ever drone acquisition.- A benefit for HAL, BHEL.
13. JioStar is expanding its AI-generated content strategy after the success of its AI-produced Mahabharat adaptation, with plans to develop multiple new AI-created series and hire specialized talent to scale AI-driven storytelling and production capabilities.
14. India will release a revised Wholesale Price Index (WPI) series and introduce new Producer Price Indices (PPI) on June 15
15. India is targeting $1 trillion in total exports by FY27 according to the Trade Minister. 

International news:

1. The Nasdaq fell over 4% as investors questioned the sustainability of AI-driven spending and reacted to expectations of higher interest rates
2. Nonfarm payrolls increased by 172,000 in May, significantly exceeding market expectations of 88,000 and indicating stronger-than-expected job growth.
3. Bitcoin fell below $60,000 for the first time in nearly two years
4. SpaceX has signed a $30 billion computing infrastructure agreement with Google
5. International Development Finance Corporation will invest $1.5 billion in an Indo-Pacific energy platform to support the development of LNG and other energy infrastructure across South and Southeast Asia.
6. The U.S. House of Representatives has passed a war powers resolution to halt military action against Iran
7. Japanese Prime Minister Sanae Takaichi is reportedly planning a visit to India in early July 2026 for talks
8. North Korea has reportedly unveiled a new facility designed to produce fuel for nuclear weapons
9. The U.S. International Development Finance Corporation (DFC) is investing $1.5 billion (Rs.14,400 crore) to build energy infrastructure in Asia, mainly in India, with a partnership of I Squared Capital ( Private Investor)
10. Secretary of State Marco Rubio said Washington wants to end sanctions waivers that allow countries such as India to buy Russian oil “as soon as possible,”
11. The U.S. Trade Representative has proposed a 12.5% Section 301 penalty tariff on most Indian exports over alleged forced-labour enforcement gaps, increasing pressure on India to finalise a bilateral trade deal that could lock in lower tariff rates and preserve competitiveness versus regional peers.
12. Anthropic has confidentially filed for a U.S. IPO According to reports, Anthropic’s latest private funding round valued it at around $965 billion
13. OPEC+ is expected to raise July oil production quotas by 188,000 barrels per day
14. Japan’s Mitsubishi UFJ Financial Group is launching a $250 million India-focused startup fund targeting early- and growth-stage companies
15. Treasury bonds fell, and yields rose as doubts over U.S.-Iran negotiations. 

Nifty in first week of June series has been volatile but the Net shorts in Index has risen towards 2.68 lacs at almost 8% now showing signs of possible bottom formation very soon but the possible reversal could be from 22500-22800 & reversal could come from second half of June series & a non stop rally could be a possibility towards 24600-25000 but as of the coming week immediate hurdle lies at 23500-23800 while support still remains at 22500-22800 kind of levels. The possible broader support could be from Bank Nifty.

Bank Nifty, on the other hand, shows signs of strength early. Any move above 55000 could give us 56700-58000 kind of levels, while crucial support remains at 53000 kind of levels. The support may continue to come from Private sector banks.

“Nifty IT” may continue to find its crucial support at 26000-27000 kind of levels while an upmove may get restricted at 31000-32000 as of now.

Sensex may now find its crucial support at 72000-73000 kind of levels, while on the upside, we may see a pullback towards 75000 kind of levels.

Nifty Financials may find its crucial support levels now at lower levels of 24000-24500. The immediate upside target lies at 27000 kind of levels.

As of January 2026, the number of Demat Accounts has hit a whopping 21.6 crores. This not only helps the capital markets directly but also helps Equity investments.

The monthly SIP in Indian markets have now increased to an all-time high of Rs. 32,087 cr. per month as on March 2026. 

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  23366.70
Nifty Potential Upside: 23500-23800 / 24600-25000 (As the case may be)
Nifty Immediate Crucial Support: 22500-22800

Sensex CMP: 74243.34
Sensex Potential Upside: 81000-82000
Sensex Immediate Crucial Support: 72000-73000

Bank Nifty CMP:  54496.25
Bank Nifty Immediate Upside: 55000 / 56700-57000 / 58000 (As the case may be)
Bank Nifty Immediate Crucial Support: 53000

Nifty Financial CMP: 25056.80
Nifty Financial Immediate Target: 27000
Nifty Financial Immediate Crucial Support: 24000-24500

Nifty IT CMP: 29010.30
Nifty IT Immediate Target: 30000 / 33000
Nifty IT Immediate Crucial Support: 26000-27000

About the Author:

Mr Vishal Gupta, a SEBI Registered Research Analyst, is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets, who has spent years comprehending an industry-wide shift and risk management with more than 14+ years exploring in-depth analysis of the Equity & Derivatives.

He has also been into teaching Fundamental Analysis for quite some time, giving investors/traders comprehensive knowledge & skills of the Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
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