Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 105 points; key levels to watch

Indian equity benchmark indices are set for a gap-down open on Monday led by a cautious bias as renewed US-Iran military escalation revives concerns over global energy supplies, triggering a rebound in crude oil prices and prompting a broader risk-off tone across Asian markets. India's Q1 GDP data and the US non-farm payrolls will be the key macroeconomic events this week.

Indian equities may trade in a broader range amid a lacklustre environment, mixed global cues and persistent geopolitical tensions, despite Brent crude cooling, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. Investors are awaiting clarity on geopolitical developments, while key global and domestic macro triggers are likely to guide market direction, he said.

GIFT Nifty, Asian markets & US stocks GIFT Nifty Futures on the NSE International Exchange were 104.90 points, or 0.43 per cent, down at 24,237, hinting at a weak start for the domestic market on Monday. Share markets slipped on Monday in Asia as fresh fighting broke out between the US and Iran, lifting oil prices. KOSPI crashed nearly 2.5 per cent, while Nikkei and Hang Seng were down a per cent each.

Wall Street's main indices ended lower on Friday, with investors turning cautious after Fed Chair Kevin Warsh reiterated the central bank's focus ‌on fighting inflation, increasing prospects for a rate hike. The S&P 500 lost 0.25 per cent, to 7,711.76 and the Nasdaq Composite fell 0.52 per cent, ⁠to 26,402.42 The Dow Jones Industrial Average closed 0.02 per cent, lower to 53,559.99.

Crude, US dollar, gold & more Brent futures climbed 1.4 per cent to $89.38 a barrel after US forces struck two of Iran's launchers on its island of Larak on Sunday. In response, Iran was attacking US forces stationed in Jordan. Gold was a fraction firmer at $4,454 an ounce, having shed 3.2 per cent on Friday as yields spiked. The dollar index ticked down slightly to 99.6 after jumping on Friday.

The market remains cautious as global monetary policy uncertainty, geopolitical developments and elevated crude oil prices continue to influence investor sentiment, said Ajit Mishra, SVP of Research at Religare Broking. "Investors should avoid aggressively chasing prices and instead use meaningful declines to gradually accumulate fundamentally strong companies."

FII-DII flows Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 5,039.80 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 5,183.93 crore on a net-net basis. FPIs have remained net buyers of Indian equities so far in August, investing Rs 30,919 crore.

The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and more importantly the improving earnings growth in India. A significant trend in FPI investment in India recently is the direction of flows towards the mid-caps and small-caps, said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Nifty50, Sensex & India VIX outlook A small bullish candle was formed on the daily chart with upper and lower shadow, which is indicating minor bounce back from near the support near 24,000. After moving below the higher support of the ascending trend line at 24,150 on Thursday, Nifty was not able to show sharp follow-through weakness, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"This is a positive indication and such false downside breakouts more often result in sharp upsides. The underlying trend of Nifty remains range bound (24,400-24,000) with positive bias. Any sustainable bounce-back from near the lower range could open a sizable bounce towards 24,300-24,400 levels in the near term. Important support for trend reversal is placed at 24,000," it said.

Sensex witnessed profit booking as overall bias remains sideways to mildly positive, as it holds above the rising trendline, but it is still trading below the 200-Day EMA, which remains a key hurdle near 78,484. Sustained trading above 77,680–78,000 could strengthen the recovery and open the way for further upside, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking.

India VIX declined to 10.68, down 3.50 per cent, indicating subdued volatility expectations and suggesting that the market may continue to consolidate unless a decisive breakout emerges, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

Nifty Bank outlook Nifty Bank formed a neutral candle with upper and lower wicks on the daily charts, reflecting indecision and a lack of clear directional momentum. The daily RSI also remained in the neutral zone, further highlighting the absence of strong momentum, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going forward, the 57,000–56,900 zone is expected to serve as a crucial support area. A sustained hold above this region could maintain the ongoing consolidation phase. On the upside, the 57,900–58,000 zone is likely to act as an immediate resistance hurdle. A decisive breakout above 58,000 or a breakdown below 57,000 could signal the end of the current consolidation phase," he said.

Bank Nifty is facing selling pressure near the falling trendline resistance around 58,000–58,200. However, it continues to hold above its 100-DMA and 200-DMA, keeping the broader structure range-bound rather than decisively bearish. As long as 57,000 holds on the downside and 58,000–58,200 remains a hurdle, said Vatsal Bhuva, Technical Analyst at LKP Securities.