Stock market today: Gift Nifty down 4 points; key levels for Nifty, Sensex & Nifty Bank

Indian benchmark equity indices are likely to open little changed on Tuesday, with sentiment weighed down by global trade uncertainty and persistent foreign fund outflows, while investors remain focused on quarterly corporate earnings. Global sentiments were subdued amid Donald Trump's fresh tariff threat on eight European Union members over Greenland.

Nifty futures on the NSE International Exchange traded 3.50 points, or 0.01 per cent, down at 25,592.50, hinting at a flat start for the domestic market on Tuesday. Asian stocks fell on Tuesday, as a resurgence of trade-war concerns hit risk sentiment and sparked selling in US assets. Nikkei and Hang Seng dropped nearly a per cent each, while KOSPI lost a third per cent.

US Stocks observed a holiday on Monday on the account of Martin Luther King Jr. Day, while Nasdaq and S&P 500 futures slid 1 per cent in early trade. European shares logged their biggest daily drop in two months on Monday as investors were rattled by President Donald Trump's threat of additional tariffs on eight European countries until the US is allowed to buy Greenland.

The dollar retreated to its lowest level in a week ‌in early trading on Tuesday after threats from the White House towards the European Union over the future of Greenland triggered a broad selloff across US stocks and government bonds. The dollar index slid 0.1 per cent to 99.004.

Oil prices rose on Tuesday after better-than-expected economic growth ​data from China lifted demand optimism, with markets also watching President Donald Trump's threats of ‌increased US tariffs on European nations over his desire to buy Greenland. In other commodities, gold was little changed at $4,670 per ounce, just shy of the record high touched on Monday.

Despite the prevailing weakness in the index, select sectors and themes continue to show relative strength. Participants are therefore advised to align their positions accordingly, focusing on sectoral leadership and maintaining disciplined risk management, said Ajit Mishra, SVP of Research at Religare Broking.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,262.82 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,234.30 crore on a net-net basis.  

Nifty50 & Sensex outlook

"We are of the view that the current market texture is weak, but a fresh selloff is possible only if 25,500/82,900 is dismissed. Below this level, the market could slip to 25,400-25,350/82,600-82,500, said Shrikant Chouhan, Head Equity Research, Kotak Securities.

On the flip side, above 25,650/83,500, a pullback move could extend till 25,750-25,800/83,800-84,000. The intraday market texture is volatile and non-directional. Hence, level-based trading would be the ideal strategy for day traders, he said.

The Nifty remained under bearish control as intraday volatility persisted, and every rise was sold into, said Rupak De, Senior Technical Analyst at LKP Securities. "Market fear remained elevated, as reflected by a spike in India VIX. In the near term, the index may continue to drift lower, with a potential downside target around 25,200, while resistance is placed near 25,700."

Nifty briefly crossed the 25,600 mark but lacked follow-through buying. Immediate resistance is placed in the 25,700–25,750 zone, while key support lies at 25,400–25,450. The daily RSI slipped further to 37.34, indicating weakening momentum and confirming the continuation of a corrective phase, said Hitesh Tailor, Technical Research Analyst at Choice Broking.  

Nifty Bank outlook

Nifty Bank has formed a bearish candle which remained contained inside previous session price range signaling consolidation amid stock specific action. Bank Nifty continues to outperform with larger rallies and limited correction. Overall, in the last 7 weeks Bank Nifty continued to consolidate in a range of 60,400-58,700, Bajaj Broking said.

"Only a breakout or a breakdown will signal the next directional move in the index. Bank Nifty has immediate support at 59,300 levels while key short term support is placed at 58,700-59,000 levels being the lower band of the last 7 weeks range and 50 days EMA. On the higher side, the recent all time high of 60,200-60,400 remains a key hurdle area," it said.

Nifty Bank faces a critical resistance zone at 60,200–60,300, which is expected to act as a significant hurdle in the near term. A sustained close above 60300 could open the doors for a sharp upside extension towards the 60800 level, where the next supply zone is likely to emerge, said Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

"On the downside, immediate support is placed around the 20 day EMA zone of 59,600–59,500. A breach below this pocket could trigger further weakness and invite short term corrective pressure," it said.