Nifty Surges: Market Closes High on Trade Deal & Foreign Inflows

The Indian equity benchmark, Nifty, showcased impressive resilience on Thursday, marking its fifth consecutive session of gains. This positive momentum was largely driven by a renewed sense of optimism surrounding the India-UK free trade agreement (FTA) and a favorable drop in crude oil prices. It’s interesting to note how geopolitical and commodity market shifts directly translate into market sentiment.

The India-UK FTA is set to formally take effect on July 15, 2026, following the resolution of a steel-related issue. This agreement is projected to significantly boost bilateral commerce, potentially doubling two-way trade to an impressive $100 billion by 2030. Furthermore, the market received a substantial lift from foreign fund inflows, with foreign institutional investors (FIIs) purchasing equities worth Rs 101.59 crore on June 17.

Despite these positive drivers, the session wasn’t without its moments of volatility. Nifty experienced a flat-to-negative start, oscillating in a range-bound trade for much of the day. This was partly due to selling pressure observed in IT stocks and a degree of caution following the US Federal Reserve’s decision to maintain interest rates. While rates remained unchanged, the latest projections hinted at the possibility of at least one rate increase later in the year, which naturally introduces some market uncertainty.

However, the market demonstrated a remarkable turnaround in the final hour of trading. Nifty saw a sharp recovery, pushing it to close near its day’s high. Looking at the broader picture, most sectoral indices finished in the green, with the notable exceptions of the IT and Metal sectors.

In the F&O segment, Max Healthcare Institute, FSN E-Commerce Ventures, and Adani Power emerged as the top gainers. Conversely, Infosys, NBCC (India), and L&T Finance were among the top losers. The India Volatility Index (VIX), a key indicator of short-term market expectations, decreased by 3.90%, settling at 12.67. The 50-share Nifty itself advanced by 82.30 points, or 0.34%, to conclude at 24,168.00.

Drilling down into the futures market, Nifty June 2026 futures closed at 24209.00 (LTP), trading at a premium of 41.00 points over the spot closing of 24168.00. The Nifty July 2026 futures finished at 24302.90 (LTP), indicating a larger premium of 134.90 points over the spot closing. Nifty June futures observed a contraction of 728 units, bringing the total open interest (Contracts) to 2,57,843 units. The near-month derivatives contract is set to expire on June 30, 2026.

Among the most actively traded contracts, HDFC Bank June 2026 futures traded at a discount of 10.90 points at 789.90 (LTP) compared to its spot closing of 800.80, with 90,185 contracts traded. Infosys June 2026 futures also traded at a discount of 1.70 points at 1125.70 (LTP) against a spot closing of 1127.40, with 39,474 contracts traded. Tata Motors Passenger Vehicles June 2026 futures saw a discount of 2.35 points at 362.20 (LTP) compared to its spot closing of 364.55, with 26,403 contracts traded.

In contrast, State Bank of India June 2026 futures traded at a premium of 3.70 points at 1046.20 (LTP) over its spot closing of 1042.50, with 21,841 contracts traded. Reliance Industries June 2026 futures also commanded a premium of 2.30 points at 1333.30 (LTP) compared to its spot closing of 1331.00, with 19,595 contracts traded.

In the index option segment for the June month expiry, the 24500 SP Nifty call was the most active, adding 4,461 units in open interest. For Nifty puts, the 24000 SP was the most active, with an addition of 7,934 units in open interest. The maximum OI outstanding for Calls was observed at 25000 SP (1,53,855 units), while for Puts, it was at 24000 SP (1,00,292 units), providing insights into the expected trading range.

From a technical perspective, the resistance level for Nifty is identified at 24225.85, with the pivot point at 24131.40 and support at 24073.55. The Nifty Put Call Ratio (PCR) for the June month contract stood at 1.08. Companies with the highest PCR included Polycab India (1.54), Bosch (1.43), Cholamandalam Investment and Finance Company (1.18), Petronet LNG (1.12), and IDFC First Bank (1.04).

Finally, examining the open interest movements in the June month futures, HDFC Bank saw a significant addition of 17,697 units, Infosys added 16,397 units, State Bank of India increased by 1,432 units, and Reliance Industries added 4,783 units. BSE, however, experienced a contraction of 985 units in open interest. These movements highlight the areas of increased and decreased market interest.