Nifty, Sensex, Nifty Bank outlook for today: Gift Nifty up 65 points; key levels to watch

Indian benchmark indices are set to open little changed, on a positive note, on Friday, after falling in the last two sessions, while rising oil prices due to Middle East ​tensions and a weak revenue forecast from Infosys weighed on sentiment. Brent crude hovered around $106 after Iran displayed its ⁠grip over the Strait of Hormuz.

Nifty futures on the NSE International Exchange were 63.50 points, or 0.26 per cent, up at 24,226.50, hinting at a positive start for the domestic market on Friday. Asia shares struggled on Friday and oil prices resumed their rise. Nikkei was up one-third a per cent, while KOSPI was down one-fourth a per cent. Hang Seng dropped two-third of a per cent.

Markets are expected to remain under pressure in the near term, with stalled US–Iran negotiations, continued naval blockades, and Iran's seizure of two ships keeping risk sentiment fragile. Until there is credible de-escalation, the overhang on crude, the rupee, and institutional flows are unlikely to lift, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

US stocks fell in choppy trading on Thursday as hopes dimmed for a quick end ​to the Iran war, while investors grappled with a mixed bag of earnings reports. The Dow Jones Industrial Average fell 179.71 points, or 0.36 per cent, to 49,310.32, the S&P 500 lost 29.50 points, or 0.41 per cent, to 7,108.40 and the Nasdaq Composite shed 219.06 points, or 0.89 per cent, to 24,438.50.

Oil prices rose over fears of renewed military escalation in the Middle East on Friday after Iran released footage of commandos boarding ​a cargo ship in the Strait of Hormuz and on reports Tehran's air ‌ defences had engaged 'hostile targets'. Brent crude futures rose 1.17 per cent to $106.3 a barrel while West Texas Intermediate futures were up 1.12 per cent at $96.92.

The dollar was on track for its first weekly gain in three weeks on Friday, as stalled ‌peace negotiations between the US and Iran dampened hopes for an immediate easing of Middle East tensions. The dollar index was little moved at 98.81. The dollar has drawn safe-haven demand amid the uncertainty. Spot gold was flat at $4,691.60 an ounce.

The weakness is driven by a sharp spike in crude oil prices amid uncertainty surrounding the progress of US–Iran negotiations and disruptions around the Strait of Hormuz, which weighed on global sentiment, said Ajit Mishra, SVP of Research at Religare Broking. "Participants should remain focused on stock selection and manage trades accordingly."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,254.71 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 941.35 crore on a net-net basis.  

NIfty50 & Sensex outlook

The market held the negative momentum throughout the day after a gap-down open. It is forming a continuation of correction on intraday charts, and a bearish candle has been formed on daily charts, which is largely negative. For day traders, the 50-day SMA or 24,300/78200 would act as an immediate resistance zone, said Shrikant Chouhan, Head Equity Research at Kotak Securities.

"Below this level, the correction wave is likely to continue. On the downside, the index could slip to 24,000/77,000. Further downward movement may continue, potentially dragging the index to 23,900/76,700. On the upside, a move above 24,300/78,200 could lead to a bounce back towards 24,450–24,500/78,500-78,800," he adds.

Nifty found resistance around the 100 EMA, leading to a fall towards lower levels. Meanwhile, on the lower end, it found support at the 10 EMA before closing slightly higher, said Rupak De, Senior Technical Analyst at LKP Securities.

"If it falls below 24,150 decisively, it might decline towards 23,900. However, if it moves above 24,200, it could rise towards 24,500–24,600. A decisive breakout from the 24,150–24,200 range is required to witness a directional move in the Nifty," he said.  

Nifty Bank outlook

Nifty Bank formed a bearish candlestick pattern signalling consolidation with corrective bias for the second session in a row after recent strong up move. It has witnessed profit booking, which has pushed the daily and weekly stochastic oscillators into overbought territory, said Bajaj Broking, which expects the index to consolidate in the range of 54,000-57,500.

"On the higher side only a breakout above the key resistance area of 57,500 will infuse momentum and will open upside towards 58,500-59,000 levels in the coming weeks being the previous breakdown area and key retracement of previous decline. From a short-term perspective, support is placed in the range of 54,500–54,000 zones, being the confluence of last week's low," he said.

Nifty Bank ended on a negative note and slipped below its 100 day and 200 day EMA levels, which indicates a weakening medium term structure and cautious sentiment among participants, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the 55,900–55,800 zone is expected to act as crucial support, as a prior swing low is placed in this region. Any sustainable move below 55800 may intensify weakness and result in further correction towards the 55,200 level. On the upside, the 200 day EMA zone of 56,650–56,750 will act as an immediate resistance area," he said.