Stock market today: Gift Nifty down 56 points; key levels for Nifty, Sensex & Nifty Bank

Indian equity benchmark indices are likely to open lower on Thursday as foreign outflow jitters and a depreciating rupee could continue to dampen sentiments. Investors are now awaiting the Reserve Bank of India's policy decision on Friday as Robust GDP growth data for the September quarter released last week raised questions about the need for lower rates.

Nifty futures on the NSE International Exchange traded 56.20 points, or 0.22 per cent, down at 26,080, hinting at a negative start for the domestic market on Thursday. Asian stocks made a lacklustre start to the trading session on Thursday. Nikkei jumped more than a per cent, while KOSPI dropped in similar fashion. Hang Seng was also seen lower.

Key economic releases will be crucial in shaping expectations around the US interest rate trajectory, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "In the near term, we expect markets to trade range-bound, tracking currency trends, RBI monetary policy cues, and developments on the trade negotiation front."

US stocks advanced to close higher on Wednesday, as a flurry of economic data kept expectations elevated for an interest rate cut by the Federal Reserve next week. The Dow Jones Industrial Average rose 408.44 points, or 0.86 per cent, to 47,882.90, the S&P 500 gained 20.35 points, or 0.30 per cent, to 6,849.72; and Nasdaq Composite rose 40.42 points, or 0.17 per cent, to 23,454.09.

The US dollar was soft on Thursday after lacklustre economic data cemented the case for a rate cut from the Federal Reserve next week, providing relief to the yen and pushing the euro to its highest level in nearly seven weeks. The US dollar index was last down 0.4 per cent at 98.878. The yield on the US 10-year Treasury bond was last steady at 4.0749 per cent.

Elevated crude prices and currency volatility kept investors cautious. All focus now shifts to the upcoming RBI policy, where markets are hopeful of a long-pending double rate cut, said Vikram Kasat, Head of Advisory at PL Capital. "A supportive stance could revive sentiment, particularly for the BFSI sector, which is already showing early signs of momentum."

Oil prices moved slightly higher on Thursday after Ukrainian attacks on Russia's oil infrastructure signalled potential supply constraints, and stalled peace talks tempered expectations of a deal restoring Russian oil flows to global markets. Brent crude rose 14 cents, or 0.22 per cent, to $62.81, while US West Texas Intermediate rose 16 cents, or 0.27 per cent, to $59.11.

Precious metals continued to advance their recent hot streak. Gold was 0.2 per cent higher at $4,213.38 per ounce, while silver was trading up 0.1 per cent at $58.5415 per ounce, extending gains that saw the metal hit a record high of $58.98 on Wednesday into a ninth consecutive day.

The rebound in private banking heavyweights and continued strength in IT were encouraging, but their sustainability will be the key for any meaningful recovery, said Ajit Mishra, SVP of Research at Religare Broking. "Participants should manage position sizes prudently and maintain a selective approach while considering opportunities in rate-sensitive pockets on dips."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,206.92 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,730.41 crore on a net-net basis.  

Nifty50 & Sensex outlook

Nifty broke the psychological level of 26,000 but managed to close above its 20-DMA support, which was breached during the session, said Nandish Shah, Deputy Vice President at HDFC Securities. "A level above 20-DMA and previous swing low of 25,842 have kept the hope alive for Nifty bulls. However, on the upside, the band 26,150-26,200 could offer resistance in the short term."

Nifty50 holds immediate support in the 25,800–25,850 range. Resistance is expected around 26,100–26,150, where selling pressure may re-emerge unless a strong recovery builds, said Hitesh Tailor, Research Analyst, Choice Equity Broking. "Volatility stayed subdued, with India VIX remaining low, indicating that despite the decline, the market is still in a consolidation phase."  

Nifty Bank outlook

The zone of 59,400–59,500 zones is likely to act as an important resistance zone for Nifty Bank, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "Any sustained move above 59,500 could push the index, potentially taking it higher towards 59,800, followed by 60,100. On the downside, the support is placed in the zone of 59,000-58,900," he said.

"On daily chart, Nifty Bank took support near its 20-day EMA and sharply rebounded, suggesting buyers are actively defending this level. However, RSI remains in a bearish crossover as a cautious stance is advisable despite the rebound, said Vatsal Bhuva, Technical Analyst at LKP Securities. "Ahead of the RBI policy, volatility is expected, with support at 58,900 and resistance at 59,800 and 60,000."