Market Insights and the probable movement of the NIFTY 50 Index for tomorrow, June 4, 2025.
The analysis incorporates the provided data on FII (Foreign Institutional Investors), DII (Domestic Institutional Investors), and proprietary (Pro) trading activity, along with market sentiment, technical analysis, and macroeconomic factors.
Market Insights and Probable Movement of NIFTY 50 Index for June 4, 2025
1. The Pulse of the Market:
Setting the Stage
The NIFTY 50 Index, a benchmark for India’s equity market, closed at 24,542 on May 3, 2025, reflecting a decline of 174.6 points (-0.71%) from the previous day’s close of 24,716.6. This downward movement aligns with weak global cues and profit-taking after a robust Q4 FY25 GDP growth of 7.4%, which beat estimates. The market is navigating a complex landscape of domestic resilience, global trade tensions, and institutional trading dynamics.
The Gift NIFTY futures, trading at 24,864 (up 94 points), signal a potential positive opening, but volatility remains a key concern due to mixed global sentiment and upcoming macroeconomic data releases.
2. Institutional Tug-of-War:
FIIs vs. DIIs
The recent data on institutional activity reveals a cautious stance by Foreign Institutional Investors (FIIs), who have been net sellers in the index futures market, offloading positions worth ₹10,31,54 crore on May 3, 2025, compared to ₹89,066 crore on May 2. Conversely, Domestic Institutional Investors (DIIs) have maintained a bullish outlook, with net buying of ₹45,236 crore on May 3, up from ₹40,429 crore the previous day. This divergence suggests DIIs are absorbing FII selling pressure, stabilizing the market. However, the cumulative net position in index futures remains negative at ₹69,389 crore, indicating a bearish tilt among FIIs, which could cap upside potential unless global cues improve.
3. Options Market Signals:
Decoding Volatility
In the options market, FIIs recorded a net short position of ₹71,622 crore on May 3, a slight improvement from ₹58,184 crore on May 2, while proprietary traders shifted to a net long position of ₹42,968 crore. The daily variation in index options shows significant activity, with FIIs reducing their short exposure by ₹7,413 crore.
The India VIX, a measure of market volatility, has decreased recently, suggesting lower fear among investors, but the options data indicates cautious hedging. A potential breakout above 24,740 could trigger bullish momentum, while a drop below 24,650 may signal further weakness, as per technical analysis from Enrich Money.
4. Technical Trends:
Charting the Path Ahead
The NIFTY 50 is currently trading within an ascending channel, with key support at 24,500 and resistance at 24,800, as noted in technical outlooks. The index’s failure to sustain above 25,000 in recent sessions highlights a critical resistance zone. If the index breaks above 24,740, it could target 24,820–24,950, but a fall below 24,650 might drag it toward 24,370–24,515.
The Relative Strength Index (RSI) and other momentum indicators suggest a neutral to slightly bearish bias in the short term, with a buy-on-dip strategy favored for long-term investors.
Posts on X also indicate mixed sentiment, with some traders anticipating a bounce if 24,850 is breached, while others warn of a slip below 24,500
.5. Macroeconomic Winds:
Global and Domestic Influences
Global markets are under pressure due to U.S. tariff threats on steel imports and political uncertainty in Europe, particularly France’s snap elections. Domestically, India’s strong GDP growth and robust GST collections of ₹2.01 lakh crore in May provide a positive backdrop, but rising crude oil prices and a weakening rupee (at 85.55 against the USD) could weigh on sentiment.
The early monsoon onset and the RBI’s record dividend offer some support, but the market’s reaction to global trade tensions and upcoming U.S. economic data will be pivotal.
Sector rally,
Realty and Pharma are showing resilience, while IT and Metal indices are under pressure, suggesting selective opportunities.
6. Probable Movement:
A Cautious Optimism based on the interplay of institutional flows, technical levels, and macroeconomic factors, the NIFTY 50 is likely to open higher on June 4, 2025, driven by positive Gift NIFTY signals. However, sustaining above 24,740 will be crucial to maintain bullish momentum toward 24,900–25,000. Failure to hold this level could see the index test support at 24,370 or lower.
Investors should watch for FII activity, as continued selling could pressure the index, while DII buying may cushion declines. A range-bound session with stock-specific action is probable, with traders advised to adopt a buy-on-dip strategy near support levels and monitor global cues closely.
7. Strategic Recommendations:
Navigating the Market
For traders, intraday opportunities lie in monitoring key levels (24,740 for upside, 24,650 for downside) and focusing on sectors like Realty and Pharma, which are showing strength.
Long-term investors should consider quality stocks at current valuations, leveraging dips toward 24,500 for accumulation.
Hedging with options is advisable given the volatility risks. Always consult registered financial advisors before acting on these insights, as market movements carry inherent risks. the narrative.
Anish J Parashar
Indirect tax india research
Disclaimer: Trading involves high risks, and past performance is not indicative of future results. Always conduct thorough research and consult a financial advisor before making investment decisions.
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