Domestic markets are likely to open on a flat-to-negative note on Wednesday amid fresh escalation of tensions between Iran and the US. The Gift Nifty, which was ruling sharply higher, turned lower after the fresh attacks in Iran.

 Gift Nifty at 23,210 indicates that the market may see a gap-down opening of about 120 points.

With the volatility index cooling down, analysts expect the market to remain stable at lower levels.

According to Hariprasad K, SEBI-registered research analyst and founder of Livelong Wealth, a key positive for the Indian market is the cooling in crude oil prices. “Brent crude has slipped below recent highs, easing some pressure on India’s inflation outlook and current account concerns. Additionally, the rupee has shown signs of stabilisation following recent RBI measures aimed at supporting foreign inflows and strengthening currency liquidity,” he said.

However, persistent FII selling, elevated bond yields and uncertainty around global growth continue to limit risk appetite. Investors are also likely to remain cautious ahead of the US CPI data, which could determine the next leg of global market direction, he cautioned.

Asian stocks down

Meanwhile, Asian markets are ruling weak, with Japan’s Nikkei and South Korea’s KOSPI declining sharply. The selling is largely driven by continued weakness in technology and semiconductor stocks, coupled with renewed geopolitical concerns following fresh military developments in West Asia. South Korea is witnessing deeper cuts as its market remains heavily exposed to global chip demand and AI-related stocks, Hariprasad added.

From a derivatives standpoint, positioning remains range-bound but with signs of improving sentiment.

Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, said significant put open interest accumulation at the 23,200 and 23,000 strikes continues to provide a sturdy support base, while persistent call writing at the 23,300 and 23,500 strikes is likely to restrict immediate upside. “The PCR has improved to 1.05, reflecting strengthening participation from put writers and suggesting growing confidence in the support zone. Adding to the constructive undertone, India VIX declined sharply by 8.53 per cent to 15.58, indicating easing volatility expectations and reducing immediate downside risks,” he said.

Investors are also assessing the implications of India’s reduced representation in global equity benchmarks, said Ponmudi R, CEO of Enrich Money. “For the first time in more than two decades, India Inc. has dropped out of the top 10 constituents of the MSCI Emerging Markets Index, reflecting the growing dominance of global technology, artificial intelligence and semiconductor-related companies within emerging-market portfolios. The development highlights the shifting composition of global capital flows and may influence foreign investor allocation trends over the medium term,” he said.

Published on June 10, 2026