The Indian stock market benchmark indices, BSE Sensex and Nifty 50, are likely to open lower on Monday as a sharp sell-off in the overnight global markets and renewed tensions in the Middle East weakened hopes of a resolution to the broader US–Iran conflict.

Asian markets traded lower, while the US stock market witnessed a steep decline, with the Nasdaq Composite recording its biggest single-day percentage loss since April 2025.

Moreover, on Friday, the Indian stock market ended a volatile session in the red after the Reserve Bank of India raised its inflation outlook, lowered growth forecasts, and kept the repo rate unchanged in its June monetary policy review.

Domestic Market Recap

On Friday, Indian indices red:

• Sensex slumped by 116.67 points (0.16%) to close at 74,243.34
• Nifty 50 moved down by 49.85 points (0.21%) to settle at 23,366.70

Gift Nifty

Gift Nifty was trading near 23,096, around 356 points lower than the previous Nifty futures close, hinting at a negative start for Indian markets.

Overnight Wall Street Performance

The US stock market closed sharply lower on Friday, snapping its nine-week winning streak as a steep sell-off in technology stocks weighed heavily on investor sentiment.

• The Dow Jones Industrial Average slipped by 695.15 points (1.35%) to close at 50,866.78.
• S&P 500 was down by 200.57 points (2.64%), ending at 7,383.74.
• The Nasdaq Composite was lower by 1,121.53 points (4.18%), finishing at 25,709.43.

Crude Oil Prices

Crude oil prices surged after Israel launched fresh strikes on Lebanon, undermining the ceasefire agreement between the two countries and raising concerns over potential disruptions to regional energy supplies.

• Brent crude soared by 2.5% to $95.42/barrel

Overnight Major Global Events Driving Sentiment

1. US–Iran War: Iran launched missiles at Israel, marking the first major escalation since a fragile ceasefire came into effect in early April. Tehran had earlier warned of retaliation after Israel carried out strikes on Beirut’s southern suburbs on Sunday, a move that Iran said violated the ceasefire agreement.
2. US Nonfarm Payrolls: The US economy delivered a third consecutive month of strong employment growth in May. Nonfarm payrolls increased by 172,000 jobs, following an upwardly revised gain of 179,000 jobs in April. 
3. India GDP: India’s economy grew 7.8% in the January–March quarter of FY26, surpassing market expectations on the back of strong domestic demand and higher government spending. The growth rate improved from 7% in the corresponding quarter a year earlier and came close to the previous quarter’s 8% expansion. For the full fiscal year, GDP growth accelerated to 7.7%, up from 7.1% in FY25.
4. Japan GDP: Japan’s economy expanded at a slower pace than initially estimated in the January–March quarter. Annualised GDP growth was revised down to 1.8% from the preliminary estimate of 2.1%, though it remained above economists’ forecast of 1.3%. On a quarter-on-quarter basis, the economy grew 0.5%, matching the initial estimate and exceeding the market expectation of 0.3%.

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