Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 115 pts; key levels to watch

Indian equity benchmark indices are expected to remain cautious on Friday amid the sensitivity to news flow over escalating geopolitical tensions in West Asia. Positive earnings from the India Inc is neutralized by the global concerns, persistent FII outflows and weakness of the Indian rupee.

Indian equity markets are expected to remain sideways in a broader range in the near term amid lack of clarity surrounding the ongoing settlement efforts in West Asia. said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Persistent Foreign Institutional Investor outflows, currency weakness, elevated crude oil prices are likely to keep overall sentiments subdued."  

GIFT Nifty, Asian markets & US stocks

GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 114.30 points, or 0.47 per cent, up at 24,268.50, hinting at a negative start for the domestic market on Thursday. Asian stocks edged lower on Friday amid geopolitical uncertainties. KOSPI and Hang Seng dropped more than a per cent each, while Nikkei also shed up to a per cent.  

US stocks ended lower on Thursday as uncertainty around US-Iran peace talks weighed on the wider market. The S&P 500 declined 0.38 per cent to end the session at 7,337.11 points. The Nasdaq declined 0.13 per cent to 25,806.20 points, while the Dow Jones Industrial Average declined 0.63 per cent to 49,596.97 points  

Crude, US dollar, gold & more

Oil prices were up on Friday after renewed fighting broke out between the US and Iran. Brent crude futures were up 1.41 per cent at $101.47 a barrel while US crude futures rose 1.18 per cent to $95.93 a barrel. Gold rose on Friday on easing fears of inflation and higher interest rates. Spot gold was up 0.7 per cent at $4,719.85 per ​ounce; the dollar index measured against key peers was a touch firmer at 98.235.

Persistent geopolitical uncertainty and cautious institutional positioning ahead of key developments kept the upside in check, said Ajit Mishra, SVP of Research at Religare Broking. "We reiterate our preference for a stock-specific approach across sectors, while remaining selective and avoiding the relatively weaker IT space."  

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 340.89 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 441.07 crore on a net-net basis.  

Nifty50 & Sensex outlook

Technically, the market hovered between the 24,300 to 24,480/77,700-78,400 price range throughout the day. A small candle on the daily charts and non-directional intraday activity indicate indecisiveness between the bulls and the bears. For day traders, 24,300/77,700 and the 20-day SMA or 24,150/77,200 would act as key support zones, said Shrikant Chouhan, Head Equity Research at Kotak Securities.

"As long as the market trades above these levels, the bullish sentiment is likely to continue. On the higher side, 24,480-24,575/78,400-78,600 would be the immediate resistance for the bulls. On the flip side, if the market falls below the 20-day SMA or 24,150/77,200, the uptrend could become vulnerable. Below these levels, traders may prefer to exit their long positions, he said.

Sensex continues to consolidate after the recent recovery rally, reflecting indecisiveness near higher levels. Immediate support is placed in the 77,250–77,350 zone, which is expected to act as a near-term demand area, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking. "On the upside, resistance is seen around 78,350–78,500, where the market may continue to witness profit booking and supply pressure."

Nifty shifted into a choppy movement with weak bias towards the end. A small red candle was formed on the daily chart with minor upper shadow. Technically, this market action indicates choppy movement at the crucial hurdle of 24,400 levels, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities

"This range bound movement or consolidation could eventually result in an uptrend continuation in the near term. The underlying trend of Nifty continues to be positive. A sustainable move above 24,400 could open more upside towards 24,600 and next 24,800 in the near term. Immediate support is placed at 24,200 levels," he adds.  

Nifty Bank outlook

Nifty Bank traded in a narrow range and finally, it ended the session above 56,000 mark. It formed a Doji candle on a daily scale, which suggests indecisiveness, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "Looking ahead, the zone of 56400–56500 is expected to act as a key resistance for the index."

A sustainable move above the 56,500 level would be critical and could trigger a sharp upside rally, with immediate targets placed at 57,200, followed by 58,000 in the short term. On the downside, the range of 55,600–55,500 is likely to provide immediate support and act as a cushion against any short-term corrective moves, Shah adds.

Nifty Bank formed a high wave candle with shadows in either direction signaling consolidation amid stock specific action. During current week it has generated a breakout above the upper band of the falling channel containing the last nine sessions corrective decline highlighting positive bias while holding above the breakout area of 55,000, said Bajaj Broking.

"It is currently placed around the last week high of 56,475. Failure to move above it will signal extension of the recent consolidation in the range of 55,000-56,475. Index has key support around 54,000-54,500 levels being the confluence of the recent low and 38.2 per cent retracement of the last 3 weeks pullback," Bajaj Broking adds.