Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty up 140 points; key levels to watch

Indian equity benchmark indices are set to begin the week on a positive note as investors take comfort from a temporary easing in geopolitical tensions, lifting risk sentiment across global markets. Market sentiment strengthened after the Trump administration signaled a pause in further military strikes on Iran to allow diplomatic efforts to continue, easing concerns over a broader conflict.

Indian equities are expected to remain under pressure as escalating geopolitical tensions in West Asia keep Brent crude oil prices elevated, weighing on the rupee and investor sentiment, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Iran's rejection of the US-backed temporary ceasefire proposal has heightened the risk of prolonged disruptions through the Strait of Hormuz and the Red Sea, keeping energy markets on edge."

GIFT Nifty, Asian markets & US stocks GIFT Nifty Futures on the NSE International Exchange were 139 points, or 0.58 per cent, up at 23,945.50, hinting at a positive start for the domestic market on Monday. Share markets were mixed in Asia on Monday as a pause in fighting in the Gulf dragged oil prices sharply lower. Nikkei and KOSPI dropped nearly a per cent each, while Hang Seng edged higher.

US stocks settled mixed on Friday as investors sold chip stocks on worries about massive spending on artificial intelligence, while falling oil prices provided Wall Street with some ‌support. The Dow Jones Industrial Average rose 0.46 per cent to 51,947.25, the S&P 500 gained 0.05 per cent to 7,411.98 and the Nasdaq Composite 0.64 per cent, to 24,975.82.

Crude, US dollar, gold & more The lull in fighting over the Strait of Hormuz saw Brent ⁠crude slide 5.2 per cent to $91.73 a barrel, while US crude dropped 5.4 per cent to $84.45. The pullback in oil helped 10-year Treasury yields fall 4 basis points to 4.63 per cent and nudged the dollar broadly lower at 101.23. In commodity markets, the drop in yields helped non-interest-paying gold climb 1.4 per cent to $4,110 an ounce.

The market has entered a more challenging phase, with elevated crude oil prices, persistent geopolitical tensions, and continued FII selling likely to keep volatility elevated in the near term, said Ajit Mishra, SVP of Research at Religare Broking. Participants should maintain a selective approach and focus on companies demonstrating strong earnings momentum, healthy balance sheets, and resilient business outlooks. 

FII-DII flows Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,892.77 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 5,453.55 crore on a net-net basis. Net FPI equity inflows stood at Rs 14,946 crore in July so far.

During this month, FPIs continued to be big sellers in markets like South Korea and Taiwan, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments. "The rise in the US 10-year bond yield to 4.7 per cent is largely negative for equities. This might slightly impact FPI flows to emerging markets."

Nifty50, Sensex & India VIX The markets has formed a long bearish candle and is also holding a lower top formation on intraday charts, which supports further weakness from the current levels. The short-term texture of the market is still on the weak side. For positional traders, the 50-day SMA or 23,850/76,200 would act as an immediate resistance zone, said Amol Athawale, VP of Technical Research at Kotak Securities.

"As long as the market is trading below this level, weak sentiment is likely to continue. On the downside, it could retest the levels of 23,600-23,550/75,400-75,200. Further downward movement may also continue, which could drag it to 23,300-74400. On the flip side, a move above 23,850/76,200 could extend the pullback till 24,000-24,100/76,700-77,000, he added.

The Sensex has slipped below key short-term levels. Immediate support is placed in the 75,400–75,500 zone, and a breach below this range could extend the decline towards 75,200–75,000. On the upside, 76,700–76,800 remains the immediate resistance zone, while a sustained move above this level could improve sentiment and pave the way for a recovery towards 77,000, said Sachin Gupta, VP of Technical Research at Choice Equity Broking.

Nifty is trading near the lower boundary of a triangle pattern, with a crucial support placed at 23,600. As long as this support is defended, the possibility of a technical pullback towards 24,000, followed by 24,200, remains intact. On the upside, the confluence of the 50-DMA and 100-DMA around the 23,850 zone is likely to act as an immediate and strong resistance, said  Nilesh Jain, VP of Head of Technical and Derivative research at Centrum Finverse.

India VIX advanced to 14.03, indicating elevated risk perception and expectations of higher near-term volatility. Option positioning also reflects a cautious undertone, said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.

Nifty Bank outlook Nifty Bank reclaimed its 200 day EMA, a key long term support level closely watched by traders. The sustainability of this pullback will be critical in determining whether sentiment in the banking space can improve meaningfully in the near term, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate resistance for Bank Nifty is placed in the 57,100-57,200 zone. Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 57,600, followed by 58,000 in the short term. On the downside, the immediate support for Bank Nifty is placed in the 56,300-56,200 zone," he added

Nifty Bank found buying interest exactly at the rising support trend line derived at by joining the previous swing lows of April and June, said By Jatin Gedia, VP of Technical Research at Teji Mandi Investment Technologies. "We expect the up move to continue towards the 57,200 - 57,400 zone. Immediate support zone is placed at 56,492 (200-DMA)."

Immediate support is placed in the 56,000-56,100 zone, which coincides with the 21 week EMA. A decisive breach below this support could trigger an extended decline towards 55,500. On the upside, 57,300 remains a crucial resistance level, and until the index reclaims it, a sell on rise strategy is advised, said Dr Ravi Singh, Chief Research Officer from Master Capital Services.