Indian Markets Dip Amid Trade Deal Uncertainty and Geopolitical Tensions

Indian benchmark indices Nifty 50 and Sensex slipped 0.4 per cent each as investor sentiment weakened amid ongoing uncertainty around the U.S.-China trade negotiations and escalating tensions in the Middle East.

Market Update at 12:30 PM: Indian benchmark indices Nifty 50 and Sensex slipped 0.4 per cent each as investor sentiment weakened amid ongoing uncertainty around the U.S.-China trade negotiations and escalating tensions in the Middle East. Broader market indices also saw weakness, with both midcap and smallcap segments declining by 0.7 per cent.

Twelve out of thirteen key sectoral indices ended in the red, reflecting widespread caution. Asian markets mirrored this trend, pressured by geopolitical developments and the lack of clear direction in trade discussions. While U.S. President Donald Trump mentioned a tariff framework with China, the absence of specific details kept markets guessing.

This spike in crude prices benefited upstream oil producers like ONGC and Oil India, which saw gains, whereas oil marketing firms faced selling pressure. On the downside, shares of Paytm tumbled 8 per cent after the government dismissed media reports suggesting the imposition of UPI transaction fees.

Market Update at 10:30 AM: India's benchmark indices traded slightly lower on Thursday, with declines led by the IT sector. Uncertainty surrounding the U.S.-China trade negotiations and escalating tensions in the Middle East contributed to a cautious investor mood. As of 10:13 a.m. IST, the Nifty 50 slipped 0.16 per cent to 25,101.3, while the BSE Sensex dropped 0.2 per cent to 82,355.26.

Broader indices, including Mid-Cap and Small-Cap segments, also saw a decline of around 0.3 per cent. Losses were recorded across 11 of the 13 major sectoral indices. Global sentiment remained subdued, with Asian markets showing little momentum and U.S. stocks closing lower overnight amid fresh geopolitical concerns.

U.S. President Donald Trump mentioned that a framework on tariff rates with China had been established, sparking some investor optimism. However, the absence of clear details left markets wary. VK Vijayakumar of Geojit Investments noted that uncertainty remains due to past credibility concerns.

Meanwhile, geopolitical stress intensified after Iran warned of potential strikes on U.S. military bases in the Middle East if nuclear talks failed.

In sectoral moves, the Nifty IT index declined 1 per cent, as many Indian tech firms depend heavily on U.S. revenues. On the stock-specific front, Paytm shares fell 8.4 per cent after the finance ministry denied reports suggesting the introduction of a merchant discount rate (MDR) on UPI payments. UBS flagged the non-implementation of MDR as a risk to Paytm's profitability outlook for FY26 and FY27.

Pre-Market Update at 8:00 AM: Indian equity indices are expected to open on a cautious note today, Thursday, June 12, with early indicators pointing to a soft start. As of 7:18 AM, the GIFT Nifty was trading around 25,167, showing a decline of 34 points from its previous close.

Asian markets showed mixed trends as investors evaluated the progress of U.S.-China trade developments. Meanwhile, Wall Street closed lower overnight following the latest U.S. inflation data and ongoing geopolitical tensions.

In the institutional segment, Foreign Institutional Investors (FIIs) were net sellers on June 11, offloading equities worth Rs 446.31 crore. Domestic Institutional Investors (DIIs), however, remained strong buyers for the 17th consecutive session, purchasing stocks worth Rs 1,584.87 crore.

On June 11, Indian markets ended slightly positive. The Nifty 50 managed to stay above the 25,100 mark, closing at 25,141.40 with a gain of 37.15 points or 0.15 per cent. The Sensex also edged up by 123.42 points, ending the session at 82,515.14. Market volatility eased further, with the India VIX falling to 13.66.

Asian equities traded in a mixed range as investors weighed the U.S.-China trade outlook. In the U.S., major indices ended lower due to rising tensions in the Middle East and uncertainty over trade negotiations. The Dow Jones remained nearly flat at 42,865.77. The S&P 500 dipped 0.27 per cent to close at 6,022.24, and the Nasdaq dropped 0.50 per cent to end at 19,615.88.

U.S. inflation data showed a minor uptick, with the Consumer Price Index (CPI) rising 0.1 per cent in May, following a 0.2 per cent increase in April. On a yearly basis, CPI grew 2.4 per cent, slightly up from 2.3 per cent.

In a significant global development, U.S. President Donald Trump confirmed a finalised trade agreement with China. The deal includes revised tariff rates: 55 per cent on U.S. imports and 10 per cent on Chinese exports.

Investors turned to gold amid geopolitical risks and lower inflation data. Spot gold increased 0.3 per cent to USD 3,364.10 per ounce, while U.S. gold futures rose 1.2 per cent to USD 3,384.40.

Oil prices surged, reaching a two-month high on Middle East conflict concerns. Brent crude edged up 0.1 per cent to USD 69.84, and WTI climbed 0.16 per cent to USD 68.26. Both benchmarks gained over 4 per cent in the previous session.

The dollar weakened on growing expectations of a rate cut by the Federal Reserve. The index slipped to 98.327, its lowest level since April 22.

For today, Manappuram, ABFRL, CDSL, IEX, Chambal Fertilisers, IREDA, RBL Bank and Titagarh continue to remain under the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.