Markets likely to make gap-down start amid renewed geopolitical tension

08 Jul 2026 Evaluate

Indian equity markets are likely to make a gap-down start on Wednesday, amid renewed geopolitical tensions in the Middle East following fresh strikes between the US and Iran. However, some support may come as foreign institutional investors (FIIs) remained net buyers, purchasing equities worth Rs 393.19 crore on Tuesday.

Some of the key factors to be watched:

FDI inflows to India increased by 44% to $39 billion in 2025: The released by United Nations Trade and Development (UNCTAD) said Foreign Direct Investment (FDI) inflows to India increased by 44 per cent in 2025 to $39 billion. It said the country continued to strengthen its position as a major investment destination.

India moving forward with the mantra of reform, perform and transform: Prime Minister Narendra Modi said that India is moving forward with the mantra of reform, perform and transform, as he underlined that the country's self-reliance is a multiplying force not only for Indonesia but for the entire ASEAN region.

RBI to Conduct VRR Auction on July 8: The Reserve Bank of India (RBI) has announced that it will conduct an overnight variable rate repo (VRR) auction for a notified amount of Rs 25,000 crore on July 8.

NBFCs' gold loans jump nearly 70% in May, fastest across segments: Data released by the Reserve Bank of India (RBI) showed that outstanding credit extended by non-banking financial companies (NBFCs) against gold jewellery surged nearly 70 per cent year-on-year in May, marking the fastest growth among all lending segments.

Indian airlines flew 1.53 crore domestic passengers in May: DGCA in its report said that Indian airlines carried 1.53 crore domestic passengers in May, over 11 per cent higher than 1.38 crore people flown in April.

Global front: The US markets ended in red on Tuesday, amid rising crude oil prices due to renewed Middle East tensions pushed up inflation concerns, indicating the possibility of a tighter monetary policy by the U.S. Federal Reserve. Asian markets are trading mostly in red on Wednesday, tracking the broadly negative cues from Wall Street overnight.

Back home, Indian equity benchmarks failed to hold on the intraday gains and ended marginally in red on Tuesday as market participants booked profits after the recent four-session rally. Investors also remained cautious ahead of the release of the US Federal Reserve's meeting minutes and the start of the June quarter earnings season. Finally, the BSE Sensex fell 104.35 points or 0.13% to 78,180.72 and the CNX Nifty was down by 31.65 points or 0.13% to 24,398.70.

Some of the important factors in trade:

Weak monsoon may fuel inflation in India, hit rural demand: Raising some concerns, the rating agency, S&P Global Ratings in its latest report has said that a weak monsoon in India may lead to higher inflation, weaken rural demand and strain fiscal balances.

CREA flags strain on Indian energy system due to this year's El Nino: The Centre for Research on Energy and Clean Air (CREA) in its reports has flagged possible strain on Indian energy system due to this year's El Nino, a recurrent weather pattern that drives up global temperatures.

India-EU FTA legal scrubbing likely to be completed in 15-20 days: Commerce and Industry Minister Piyush Goyal has said that India and the European Union (EU) are likely to complete the legal scrubbing of the FTA within the next 15-20 days. Following the legal scrubbing, both sides are likely to sign the agreement by the end of this year and implement it next year.

Markets likely to make gap-down start amid renewed geopolitical tension

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