Derivatives data suggest a balanced market setup, while easing volatility could support short-covering rallies in the near term.

Gift Nifty indicates at 23,500 indicates that market may see a gap down opening of 100 points despite positive global markets. Overnight, the S&P 500 closed at a fresh record high, while Japan’s Nikkei scaled new lifetime highs, reflecting continued confidence in global growth and technology-led earnings momentum. The strength in global equities suggests that investors are increasingly willing to look beyond near-term geopolitical headlines and focus on underlying economic resilience.

Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth, said:  markets are entering a crucial phase ahead of the RBI policy decision. “After recent volatility, traders are likely to remain selective rather than aggressively directional. Any indication on liquidity, growth outlook, or inflation management could significantly influence short-term market sentiment,” he added.

From a market perspective, the key question is whether yesterday’s late recovery can attract follow-through buying. Global cues remain supportive, but sustained upside will likely require stability in crude oil, moderation in geopolitical tensions, and improved institutional participation. Until then, markets may continue to witness stock and sector-specific opportunities rather than broad-based momentum, he further said.

Meanwhile, in a strategy report, Emkay Global Research said “We now enter FY27 with a optimistic consensus estimate of 13.8% EPS for the Nifty. The internals of the results were encouraging—robust topline, strong broad-based growth, and healthy cash flows and balance sheets. The only worry is that capex slowed down to 9% YoY. We think the strong earnings recovery sets the stage for a robust FY27 for Indian equities. Continued tension in the Middle East with an extended closure of the Strait of Hormuz (beyond the next 1-2M) is a serious risk to our thesis.”

Analysts said that it will be a stock picking market. 

Prices are clearly oscillating within a well-defined range, where a strategy of buying near strong support levels and booking profits or selling near resistance zones can be considered. At the same time, sectoral rotation continues to be the dominant theme in the market. Therefore, identifying and focusing on stocks from sectors exhibiting relative strength on a given day is likely to yield better trading opportunities and potentially generate superior returns, said Hitesh Rathi, Technical Analyst -Equity & Derivatives, Angel One.

From the derivatives perspective, the options structure remains range-bound.

Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, said significant call writing is visible around the 23,500 and 24,000 strikes, highlighting overhead resistance, while put writers continue to defend the 23,300 and 23,500 strikes. “The PCR stands at 0.99, reflecting a balanced setup between bulls and bears. Additionally, India VIX declined sharply by 7.42% to 15.31, indicating easing volatility and supporting the possibility of short-covering driven moves in the near term,” he said.

Published on June 3, 2026