Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 120 pts; key levels to watch

Indian equity benchmark indices set for a gap-down open, with investor sentiment remaining fragile as escalating tensions in the Middle East fuel a fresh surge in global oil prices and weigh on risk appetite. Early indications point to a modest gap-down opening, reflecting growing concerns over the conflict’s potential impact on global energy supplies and inflation.

Indian equities are expected to trade sideways with a marginal negative bias in the near term amid continued geopolitical tensions in West Asia, Brent crude prices rising to near their five-week high and continued FIIs selling. Stock-specific action is likely to dominate as the earnings season progresses, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. 

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 119.90  points, or 0.50 per cent, down at 23,868.50, hinting at a negative start for the domestic market on Thursday. Asian stocks rose on Thursday after US technology firms outlined significant capital spending plans. KOSPI soared more than 2.5 per cent, while Nikkei and Hang Seng were up a per cent each.

Wall Street ended lower on Wednesday as investors waited for key earnings reports to gauge the health of a market rally fed by enthusiasm for artificial intelligence. The Dow Jones Industrial Average fell 6.06 points, or 0.01 per cent, to 52,218.58, the S&P 500 lost 10.24 points, or 0.14 per cent, to 7,498.96 and the Nasdaq Composite dropped 146.30 points, or 0.57 per cent, to 25,690.90.

Crude, US dollar, gold & more
Brent crude futures rose 2 per cent to $96 per barrel in early trading after the US launched a new round of strikes on Iran and Yemen’s Houthis targeted oil tankers in the Red Sea, widening the scope of a conflict that has cast a shadow on the global markets. The dollar index was flat at 101.11. Gold prices held gains on dip-buying. Spot gold price rose 0.1 per cent to $4,133.82 an ounce.

Investor sentiment remained subdued amid persistent geopolitical tensions in the Middle East, which pushed Brent crude prices and revived concerns over inflation, said Ajit Mishra, SVP of Research at Religare Broking. “We recommend maintaining a cautious stance, focusing on relatively stronger stocks while adhering to disciplined risk and position management.”

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 819.20 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned sellers of Indian equities to the tune of Rs 418.26 crore on a net-net basis.

Nifty50, Sensex & India VIX outlook
The benchmark indices continue to form indecisive candlestick patterns, suggesting that the current range could break in either direction. However, a meaningful breakout will be confirmed only if the market surpasses 24,500/78,700 or slips below 24,000/76,800 on a closing basis, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

“Until then, the market is likely to remain stock-specific with limited index movement. The preferred strategy remains unchanged: reduce weak long positions in the 24,350–24,450/78,300–78,600 zone, while selectively accumulating quality stocks on declines,” it added.

Sensex reflects temporary weakness as the index trades below key 20 EMA and 50 EMA on the daily chart. Immediate support for it is placed near the 76,100–76,200 zone, while stiff resistance on any pullbacks is seen around the 77,400–77,500 band, said Sachin Gupta, VP of Technical Research at Choice Equity Broking. “A decisive breakout above the resistance zone will be critical to revive bullish momentum and trigger an upward move.”

A decisive breach below the crucial 24,000 level could extend the decline toward 23,850-23,800 in the intermediate term, with stronger support at 23,645. On the flip side, 24,150-24,200 is likely to act as an immediate resistance zone, followed by 24,300-24,350, said Osho Krishan, Chief Manager, Technical & Derivative Research at Angel One.

On the derivatives front, India VIX declined 3.49 per cent to 13.27, indicating easing volatility, while the PCR slipped to 0.77, reflecting a cautious undertone as call writers remained active at higher strikes, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

Nifty Bank outlook
Nifty Bank witnessed a decisive breakdown. It formed a sizeable bearish candle and closed below its 20-day EMA. The falling MACD line, coupled with rising red histogram bars, points to increasing downside momentum, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

“Going ahead, the immediate support for Bank Nifty is placed in the 56,700-56,600 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness until 56300, followed by 56,000 in the short term. On the upside, the immediate resistance for Bank Nifty is placed in the 57,500-57,600 zone,” it added.

Nifty Bank formed a sizable bearish candle with a lower high and a lower low signaling corrective decline for the third session in a row. Index tested the 57,000 levels on Wednesday’s session. Index in the last 6 weeks is seen consolidating in the range of 58,700-56,500. Only a breakout or breakdown will signal next directional trend, said Bajaj Broking Research.

“Key support is placed at 56,500 levels being the 20-week EMA and lower band of last six weeks range. A breakdown below the same will open downside towards 55,500 levels in the coming sessions. On the higher side key resistance is placed at 58,700 only a breakout above the same could trigger the next leg of the rally towards 59,300 and eventually 60,000 in the coming weeks,” he said.