Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 23 pts; key levels to watch

Indian equity benchmark indices are set to open on a muted note on Tuesday on the back of mixed global cues from West Asia. Traders will be looking at the expiry of May series contracts today. However, optimism over an imminent US-Iran peace deal was tempered by new U.S. strikes in the Middle ‌East.

Nifty may continue its gradual upmove provided crude oil prices remain soft, the rupee sustains its recovery from record lows and geopolitical tensions continue to ease, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. The easing in crude prices, rupee pressure and geopolitical concerns provided a strong boost to risk appetite and drove broad participation, he said.  

GIFT Nifty, Asian markets & US stocks GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 23 points, or 0.10 per cent, down at 24,040, hinting at a muted start for the domestic market on Tuesday. Asian stocks were mixed in the early trade. KOSPI gained nearly 3 per cent, while Nikkei and Hang Seng shed up to half a per cent.

US stocks remained closed on May 25, Monday on the account of Memorial Day. However,  the Dow Jones Industrial Average hit an intraday record high on Friday, its first since the US-Iran war ​began, as AI-driven trade and market optimism over negotiations to ‌end the war lifted risk appetite. Other two benchmark US indices also closed higher on Friday.  

Crude, dollar, gold & more In currencies, the dollar steadied on Tuesday ​on renewed safe-haven demand, though ​it remained some distance away ⁠from a six-week peak hit last week. Against a basket of currencies, the dollar was at 99.031. The developments sent Brent futures rising ​more than 1 per cent in early Asian trade to $97.32 a barrel. Elsewhere, spot gold was down 0.5 per cent at $4,545.90 an ounce.

Sentiment was primarily driven by optimism surrounding a potential US-Iran peace agreement. Investors remained watchful of foreign institutional flows and further developments in the Middle East negotiations, said Ajit Mishra, SVP of Research at Religare Broking. "We maintain a positive yet cautious stance, with a focus on stock selection based on prevailing sectoral rotation."  

FII-DII flows Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 821.75 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 3,856.88 crore on a net-net basis.  

Nifty50 and Sensex outlook Technically, markets maintained positive momentum throughout the day, which is largely positive on the backdrop of positive global sentiment. Nifty not only surpassed the 20-day SMA after a long time but also succeeded in closing above it, which supports further uptrend from the current levels, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"For trend-following traders, the 20-day SMA or 23,875/76,000 would act as a key support zone. Above this, the market could continue positive momentum towards 24,200-24,250/77,000-77,200. On the flip side, if the level of 23,875/76,000 is breached, the uptrend would become vulnerable. Below this, traders may prefer to exit their long positions," it added.

Sensex managed to reclaim the 76,000 mark and closed near the day’s high, which reflects improving short-term momentum. Immediate support is now placed around 75,700–75,900, while resistance is seen near 77,100–77,200, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking.

"Sustaining above the support range may keep bullish momentum intact, whereas a breakout above resistance could trigger upside strength in upcoming sessions. The overall market bias remains positive to bullish as the index continued to sustain at higher levels and closed with strong gains, reflecting improving investor confidence and steady buying interest in the market," he said.

The bullish crossover in the RSI is further supporting the positive momentum in the market. In the short term, the trend is likely to remain strong, with the potential to move towards 24,200 and higher, said Rupak De, Senior Technical Analyst at LKP Securities. "On the lower end, support is placed at 23,800, which had acted as a resistance level in the recent past," he said.  

Nifty Bank outlook Nifty bank is outperforming the frontline indices and formed a strong bullish candle on the daily chart. It has closed above its 50-day EMA, said Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities. "It is likely to maintain its positive bias and could advance towards 55,800, followed by 56,300 in the near term. On the downside, the 54,900–54,800 zone is expected to act as a key support level."

Nifty Bank formed a strong bullish candlestick pattern in the daily chart, with a higher high and a higher low and a bullish gap below its base 54055-54590. It is in the process of closing above the 20 & 50 days EMA highlighting positive bias. It has generated a breakout above the falling supply line joining the recent highs signaling strength, said Bajaj Broking.

"Sustaining above the Monday’s gap area will keep the bias positive and will open further upside towards 56,000 and 56,600 levels in the coming sessions. Index has immediate support at 54,000 levels while major support is placed at 53,000-52,500. The daily stochastic is in uptrend thus supports the positive bias in the index," it added.