Stock market today: Gift Nifty up 74 points; key levels for Nifty, Sensex & Nifty Bank

Indian equity benchmark indices are set to open higher on Friday, mirroring Asian peers, after softer US inflation print raised bets for further Federal Reserve easing next year. Investors are counting down to a likely hike in interest rates from the Bank of Japan that could cause waves for currencies and bonds. A weakening rupee amid delays in a potential India-US trade deal remains key concerns.

Nifty futures on the NSE International Exchange traded 73.40 points, or 0.28 per cent, up at 25,954, hinting at a positive start for the domestic market on Friday. Asian share markets rebounded on Friday. Nikkei jumped more than 1.3 per cent, while Hang Seng and KOSPI were up nearly a per cent each.

Investors will react at Bank of England (BoE) and the European Central Bank (ECB) interest rate decisions, US retail inflation and jobless claims data, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "We expect the market to consolidate within a range, tracking rupee movement, FII flows and global macro," he said.

Wall Street's stocks closed higher on Thursday as a soft inflation report fed expectations for interest rate cuts by the Federal Reserve. The Dow Jones Industrial Average rose 65.88 points, or 0.14 per cent, to 47,951.85, the S&P 500 gained 53.33 points, or 0.79 per cent, to 6,774.76 and the Nasdaq Composite jumped 313.04 points, or 1.38 per cent, to 23,006.36.

US Stocks rallied on the news, since the report could give the Federal Reserve breathing room to fight a potentially slowing economy with additional rate cuts The odds for a January rate cut are now better than one in four, according to the CME FedWatch tool, said Vikram Kasat, Head Advisory at PL Capital.

The dollar index was little changed to 98.45, while Bitcoin dropped but held $85,000. In commodity markets, gold was stuck at $4,333 an ounce , still short of its October peak of $4,381. Silver ran into profit-taking after its meteoric run, but palladium and platinum remained in demand.

Oil prices were underpinned by the possibility of further US sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers. Brent edged up 0.2 per cent to $62.04 a barrel, while US crude rose 0.2 per cent to $58.35 per barrel.

Overall activity remained stock-specific, with participants preferring selective opportunities over broad-based exposure. Given the prevailing choppiness and absence of strong triggers, stock-specific trading approach remains advisable, with an emphasis on disciplined risk management and controlled position sizing, said Ajit Mishra, SVP of Research at Religare Broking.

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 595.78 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,700.36 crore on a net-net basis.  

Nifty50 and Sensex outlook

For the bulls, 25,900/84,800 would act as an immediate resistance zone. If it manages to trade above this level, then it could move up to 26,000-26,050/85,000-85,300, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. "On the flip side, 25,750/84,300 and 25,700/84,100 would act as key support zones. Below 25,700/84,100, selling pressure is likely to accelerate. If the market falls below this level, the chances of hitting 25,575-25,550/83,800-83,700 would increase."

Nifty continues to consolidate within the 25,700–25,900 range, suggesting indecision among traders. Immediate resistance is placed in the 25,900–26,000 zone, while key supports are located at 25,700 and 25,600, said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking. "As long as it holds above the 25,500 mark, a selective buy-on-dips strategy remains advisable, albeit with strict stop-loss discipline."  

Nifty Bank outlook

Nifty Bank has formed a small bullish candlestick pattern with a long upper shadow highlighting consolidation amid stock specific action. It on expected lines is seen consolidating and forming a base in the range of 58,500-60,100, said Bajaj Broking.

"We expect the index to extend the current consolidation in the coming sessions. Key short-term support is placed at 58,200-58,600 levels being the confluence of the recent low and the major breakout area. On the higher side a move above 59,500 will open further upside towards the all-time high of 60100 in the coming week," it adds.

58,700-58,600 will act as important support for Nifty Bank as the prior swing low is placed in that region. Any sustainable move below the 58,600 will lead to further correction upto the 58,000 level in the short term, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "While on the upside, the zone of 59,200-59,300 will act as an important hurdle."