Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 53 pts; key levels to watch

Indian markets are expected to trade cautiously, balancing an improving geopolitical backdrop against renewed volatility in global technology stocks. The US continues to pause strikes on Iran, keeping hopes of a diplomatic resolution alive, although investors remain cautious as markets await tangible progress in the ongoing negotiations.

Indian equities are witnessing a short-term relief, as de-escalation in West Asia and the resultant fall in crude oil prices provided interim support, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Geopolitical developments and direction in crude oil prices are likely to be key drivers in the near term.  The earnings season is gathering pace and is expected to drive stock-specific action."  

GIFT Nifty, Asian markets & US stocks GIFT Nifty Futures on the NSE International Exchange were 53 points, or 0.22 per cent, down at 23,957, hinting at a muted start for the domestic market on Tuesday. Asian stocks tumbled in the early trade as Nikkei dropped more than 4 per cent, while KOSPI was down a per cent. Hang Seng edged higher.

Wall Street ended mixed on Monday as investors awaited guidance from major technology companies and worried that stubbornly high oil prices could force the US Fed to raise interest rates. The S&P 500 edged up 0.02 per cent ‌to end ⁠the session at 7,413.18. The Nasdaq declined 0.18 per cent to 24,932.08, while the Dow Jones Industrial Average rose 0.51 per cent to 52,210.08.

Crude, US dollar, gold & more The US dollar held at a one-month high on Tuesday as traders weighed a slim but chance ‌of a rate hike by the US Fed. The dollar index edged up 0.03 per cent to 101.55. In cryptocurrencies, bitcoin fell 1.88 per cent to $63,694.59. Brent crude futures were down $0.78, or 1 per cent, at $88 a barrel, while US West Texas Intermediate crude fell $0.88, or 1.1 per cent, to $82. 

Investor sentiment improved after crude oil prices declined sharply following reports of a temporary easing in geopolitical tensions in the Middle East, said Ajit Mishra, SVP of Research at Religare Broking. "We continue to advocate a stock-specific approach, with a preference for relatively stronger stocks across sectors while maintaining disciplined risk and position management."

FII-DII flows Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,688.23 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,329.14 crore on a net-net basis.

Nifty50, Sensex & India VIX outlook The market held positive momentum throughout the day and also formed a bullish candle on daily charts, which is largely positive. As long as the market is trading above 23,880/76,500, the pullback formation is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"On the higher side, it could retest the level of the 20-day SMA or 24,100-24,150/77,000-77,300. On the flip side, below 23,880/76,500, the selling pressure is likely to accelerate. If it falls below this level, the market could slip to 23,800-23,725/76,200-76,000," he added.

Sensex continues to trade below 100-Day and 200-Day EMA, suggesting that the broader trend is yet to turn decisively positive. Sustaining above the 76,200–76,500 support zone will be crucial for maintaining the ongoing recovery. On the upside, the 77,200–77,500 zone is expected to act as an immediate resistance, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking.

Nifty has bounced back sharply from near the cluster support of around 23,600 and is on the verge of breaking above the immediate resistance of 24,000-24,100 levels, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. "If Nifty manages to sustain above 24,100, then that could open the upside target of 24,500 in the near term. Immediate support is placed at 23,800."

India VIX declined sharply by 9.76 per cent to 12.66, indicating easing volatility and improving market sentiment. Option chain positioning has also turned constructive, said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.

Nifty Bank outlook Nifty Bank formed a Doji candle on the daily chart, reflecting indecisiveness among market participants. It continues to trade within a defined range, indicating a lack of strong directional momentum. The formation of a Doji candle near key resistance levels further highlights the ongoing tug-of-war between bulls and bears, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going forward, the 57,500-57,600 zone is likely to act as an important hurdle for the index. A decisive move above 57,600 could trigger a fresh round of buying interest, potentially pushing the index towards the 58,200 level. On the downside, the 100-day EMA zone of 56,700-56,600 will serve as a crucial support area," it added.

Nifty Bank has been consolidating and the consolidation immediate hurdle is placed at 57,500 levels while the upper band of the recent consolidation placed around 58,500-58,700 will act as a stiff hurdle for the index in the coming weeks. On the downside key support is placed at the 56,500-56,000 levels being, said Bajaj Broking Research.

"A breach below the same will lead to acceleration of decline towards 55,000 levels being the confluence of the trendline support joining previous major lows. Structurally, it has already taken 4 weeks to retrace just 38.2% of the preceding up move from 53,027 to 58,706. A shallow retracement signals overall positive bias and a higher base formation in the current corrective decline," it adds.