Nifty, Sensex, Nifty Bank outlook for today: Gift Nifty up 355 points; key levels to watch

Indian equity benchmark indices are set to open higher on Wednesday, tracking other Asian peers, after oil prices dropped below $100 a barrel on rising expectations for ​renewed US-Iran peace negotiations. Domestic markets were closed on Tuesday for Ambedkar Jayanti and traders will be keenly tracking Q4 results of India Inc.

Nifty futures on the NSE International Exchange were 353.80 points, or 1.48 per cent, up at 24,412.50, hinting at a positive start for the domestic market on Wednesday.  Asian stocks traded ​higher on Wednesday as US-Iran peace talks resumed. KOSPI surged more than 3 per cent, while Hang Seng and Nikkei was up a per cent each.

Indian markets are set to open on a strong note after the recent risk-off phase, driven largely by improving global cues and easing geopolitical concerns, said Hariprasad K, Founder at Livelong Wealth. Global markets have reinforced this positive tone. Volatility is expected to moderate following the recent spike.

The Nasdaq climbed 1,96 per cent to 23,639.08, while the S&P 500 finished up 1.18 per cent to 6,967.38  and near its record ​closing high on increasing optimism about the prospects for a Middle East resolution while investors also assessed the latest batch of bank earnings and US ‌inflation readings. The Dow Jones Industrial Average rose 0.66 per cent to 48,535.99,

Oil prices fell for a second day ‌on Wednesday on expectations peace talks between the US and Iran may resume and eventually release supply from the key Middle East producing region trapped by the closure of the Strait of Hormuz. Brent crude futures fell 0.55 per cent ​to $94.27 a barrel, while US West Texas ​Intermediate crude was down 1.1 per cent, to $90.24.

The US ​dollar lingered near six-week lows on Wednesday, surrendering nearly all the gains it ‌had made since the Middle East war erupted as hopeful signs of another round of talks between the US and Iran lifted risk appetite. The dollar index was at 98.109. Gold prices added ⁠0.1 per cent ​to $4,846 an ounce.

Fresh weakness in the rupee, continued foreign institutional outflows, and subdued global equity markets further dampened investor confidence, said Ajit Mishra, SVP of Research at Religare Broking. “Traders are advised to maintain a cautious stance, focus on stock selection based on relative strength for long opportunities, and prefer a hedged approach to manage risk.”

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,983.18 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,432.30 crore on a net-net basis.
 

Nifty50 & Sensex outlook

“Markets witnessed a modest recovery from the lower levels. We believe that 23,900/77,500 would act as a key resistance zone for traders. As long as the market is trading below this level, the weak sentiment is likely to continue,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

“On the downside, it could retest the levels of 23,600-23,500/76,600-76,300. On the flip side, above 23,900/77,500, the sentiment could change. Above this level, it could move up to 24,100/78,100. Further upside may also continue, which could lift the index up to 24,200/78,400,” it said.

From a levels perspective, the 23,600-23,500 zone continues to act as an important near-term support, coinciding with the 20 DEMA, followed by the bullish gap around 23,150, which serves as the next key support. On the upside, the 24,000-24,100 zone is seen as an immediate resistance area, said Angel One.

“The 24,400-24,600 zone emerges as a strong resistance band. Traders are advised to closely monitor these levels and structure trades accordingly. With markets gradually looking beyond geopolitical concerns, the next key triggers are likely to emerge from the upcoming quarterly earnings season. Hence, a stock-specific approach may offer better opportunities,” it added.
 

Nifty Bank outlook

Nifty Bank staged a sharp rebound and looking ahead, the 55,900–56,000 zone is expected to act as a key resistance area, said  Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. “A sustained move above 56,000 could extend the pullback rally towards 56,500, followed by 57,200 in the short term. On the downside, the 55100–55000 zone will remain a crucial support for it.”

Nifty Bank formed a bullish candle with a lower high and a lower low. It has pushed the daily stochastic oscillator into overbought territory. Hence, some consolidation cannot be ruled out. It has immediate support at 53,500-52,500 levels being the confluence of the last Wednesday gap area and 20 days EMA, said Bajaj Broking.

“It is sustaining above the same will keep the current pullback trend intact. While a breach below 52,500 will derail the positive momentum. On the higher side only a follow through strength above 56,200 will open further upside towards 57,300 and 58,000 levels over the coming sessions being the 61.8 per cent retracement of the recent decline 61,764-49,955,” it added.