Stock market today: Gift Nifty up 61 points; key levels for Nifty, Sensex & Nifty Bank

Indian equity benchmark indices are likely to open higher on Wednesday, extending gains seen in the previous session after a landmark trade deal with the European Union, while positive global sentiment may also provide support. Traders' focus is shifting towards the upcoming Union Budget of February 1.

Nifty futures on the NSE International Exchange traded 61.40 points, or 024 per cent, down at 25,444, hinting at a positive start for the domestic market on Wednesday. Asian stocks were trading mostly higher. KOSPI and Hang Seng rose more than a per cent each, while Nikkei was down half a per cent.

Sentiment improved after the India–EU FTA was finalised following nearly two decades of negotiations. The pact is expected to enhance market access for Indian exporters, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "We expect markets to remain range bound tracking global developments and geopolitical cues."

The dollar was on the ropes near multi-year ​lows on Wednesday after investors sold it aggressively when US President Donald Trump seemed to ‌ shrug off its recent decline, while Wall Street marched on to fresh record highs. The dollar index was at 95.964 after dropping over 1 per cent in the previous session when it hit a four-year low of 95.566.

The weaker dollar helped gold strike a fresh record of $5,188.95 an ounce overnight and US crude to break through its 200-day moving average for the first time in six months to $62.54 a barrel. Bitcoin has largely missed ‍out on the rally and remains pinned below $90,000.

US stocks ended mostly higher with investor ​optimism ahead of megacap earnings reports being countered by a mixed reception to the latest earnings reports. The Dow Jones Industrial ⁠Average fell 408.99 points, or 0.83 per cent, to 49,003.41, the S&P 500 28.37 points, or 0.41 per cent, to 6,978.60 and the Nasdaq Composite jumped 215.74 points, or 0.91 per cent, to 23,817.10.

Investor sentiment saw a noticeable improvement on optimism surrounding global trade developments, majorly expectations of progress on the India–EU trade deal, which eased a key overhang on domestic markets, said Ajit Mishra, SVP of Research at Religare Broking. "Participants are advised to adopt a selective, stock-specific approach, focus on relatively stable and consistent sectors."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,068.49 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 8,999.71 crore on a net-net basis.  

Nifty50 & Sensex outlook

"We are of the view that 25,000/81,400 and 24,900/81,000 would act as key support zones. As long as the market trades above these levels, a pullback formation is likely to continue. On the higher side, 25,200/81,800 would be the immediate resistance zone for the bulls," said Shrikant Chouhan, Head Equity Research at Kotak Securities.

"A successful breakout of 25,200/81,800 could push the market up to 25,300-25,350/82,200-82,400. On the flip side, below 24,900/81,000, sentiment could change. If the market falls below this level, traders may prefer to exit their long positions," he said.

A long bull candle was formed on the daily chart with a long lower shadow. Technically, this market action indicates a formation of bullish 'Piercing line' type candle patterns. This market action signals a formation of short term bottom reversal in the market, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"The underlying trend of Nifty seems to have reversed up from near the support of 24,900 on Tuesday. The next overhead resistance to be watched around 25,500 levels in the next few sessions. Immediate support is placed at 25,150 levels," he said.  

Nifty Bank outlook

Nifty Bank has formed a bullish candlestick pattern on the daily charts which almost engulfed its previous session price action, signalling buying demand at lower levels around the 100 days EMA and a lack of follow through to previous sessions sharp decline, said Bajaj Broking.

"Key support is placed at 58,000-57,500 levels being the confluence of the 100 days EMA and the major breakout area, holding above the same will open upside towards 60,000-60,400 levels in the coming sessions. The daily stochastic has generated a buy signal moving above its nine periods average thus validates positive bias," he said.

Nifty Bank closed with a long bullish candlestick on the daily chart, indicating strong buying interest. The index found support near the 58100 zone and witnessed a sharp follow-up rebound after the previous selling session, highlighting demand at lower levels, said Vatsal Bhuva, Technical Analyst at LKP Securities.

"Volatility is expected to remain elevated in the coming sessions due to the Union Budget event. The 20-day moving average and the 59,500 zone will be crucial; a sustained close above these levels could decide the next directional move. Support is placed at 58,800, while resistance stands at 59500," he said.