Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 77 pts; key levels to watch

Indian equity benchmark indices are set to open little changed on Wednesday, as renewed hostilities between the United States and Iran cloud hopes for a durable ceasefire and keep global markets on edge. Middle East tensions flared again after the United States launched strikes against Iran after President Donald Trump said that Tehran had downed a US Apache helicopter in the Strait of Hormuz.

Indian markets are expected to stabilise in the near term amid talks of a truce between Israel and Iran and easing crude oil prices, which have improved overall market sentiment, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “The absence of a definitive resolution to geopolitical tensions, coupled with concerns over inflation, commodity price volatility and monsoon trends, may keep investors cautious and limit upside.”

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 77.10 points, or 0.33per cent, down at 23,254, hinting at a negative start for the domestic market on Wednesday. Asian stocks fell on Wednesday while oil prices surged as escalating tensions in the Middle East unsettled markets. KOSPI tumbled nearly 4 per cent, while Hang Seng and Nikkei was down over a per cent each.

The US stocks fell on Tuesday as a rebound in technology shares faded and as President Donald Trump said the US ‌must react to Iran’s shooting down of a US helicopter. The Dow Jones Industrial Average rose 86.10 points, or 0.17 per cent, to 50,872.11, the S&P 500 lost 19.08 points, or 0.26 per cent, to 7,386.65 and the Nasdaq Composite tanked 250.84 points, or 0.97 per cent, to 25,678.82.
 

Crude, US dollar, gold & more
Oil prices climbed about 1 per cent in early trade, moving away from a seven-week low touched in the previous session in the wake of the fresh US attacks. Brent futures rose 0.9 per cent to $92.29 a barrel, while US West Texas Intermediate ⁠WTI crude climbed 0.8 per cent to $88.97.

The dollar held steady against major peers on Wednesday after the United States launched strikes against Iran. The dollar index edged up 0.01 per cent to 100.02. Gold prices fell over 1 per cent on Wednesday, as oil prices rose on renewed hostilities between the US and Iran, fuelling concerns about inflation and interest rate hikes.  Spot gold fell ‌1.4 per cent to $4,203.

Sentiment remained fragile amid continued uncertainty over global growth prospects, volatile crude oil prices, and persistent geopolitical tensions in the Middle East, said Ajit Mishra, SVP of Research at Religare Broking. “We maintain a cautious stance on the index and recommend focusing on stock-specific trading opportunities until a clearer direction emerges,” he adds.

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,566.03 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,159.48 crore on a net-net basis.

Nifty50, Sensex & India VIX outlook
The market has formed a small candle on daily charts, and a reversal formation was seen near 23,100/73,500 on intraday charts. 23,100/73,500 will act as a key support zone for day traders, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

“As long as the market trades above this level, a pullback formation is likely to continue, potentially moving towards 23,400–23,500/74,500-74,700 on the higher side. On the flip side, a decline below 23,100/73,500 could weaken the uptrend. Below this level, traders may prefer to exit long positions,” it adds.

The 23,380–23,400 zone is expected to act as an important hurdle for the index. A sustained move above the 23,400 could trigger an extension of the ongoing pullback rally, potentially paving the way towards the 23,550 mark. On the downside, the 23,100–23,070 zone is likely to serve as a crucial support area, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

Sensex defended the 73,000–73,200 support zone and witnessed a healthy rebound from intraday lows. The recovery after early profit booking indicates continued buying interest at lower levels and suggests that market participants remain optimistic, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking. “On the upside, the 74,500–74,700 zone remains an immediate resistance area.”

The volatility index, India VIX, cooled off by 8 per cent to 15.50, and any further decline in volatility could provide additional comfort to the bulls, said Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse.

Nifty Bank outlook
Nifty Bank formed a Bullish Marubozu candlestick Pattern in the daily chart with a similar open and low signalling a strong buying demand near lower levels. It closed above the 20 and 50 day’s EMA signalling a positive bias in the index. It formed a double bottom pattern in the daily chart with identical June, said Bajaj Broking Research.

“Immediate resistance for index is placed at 55,500-55,600 levels which is the neckline for double bottom pattern, breakout and close above these levels will signal further up move towards 56,500 levels. Failing to do so will signal consolidation in the broader range of 55,600-54,000. Immediate support for index is placed around 54,000-53,800 levels being the current week low,” it adds.

Nifty Bank has registered a breakout from a contracting wedge pattern on the hourly chart and has reclaimed its 20-day and 50-day SMAs on the daily timeframe, indicating an improvement in price structure. Supporting the bullish setup, RSI has entered a bullish crossover and is sustaining above the 50 mark, reflecting strengthening momentum, said Vatsal Bhuva, Technical Analyst at LKP Securities. 

“The breakout, coupled with improving momentum indicators, suggests a positive bias from current levels. Support is placed at 54,500, followed by 54,300, while resistance is seen at 55,500, which coincides with the recent swing high. A decisive move above 55,500 could extend the rally towards the 56,200 zone,” it said.