Stock market today: Gift Nifty down 100 points; key levels for Nifty, Sensex & Nifty Bank

Indian equity benchmark indices may open on a muted note on Wednesday even after a brief pullback in oil prices, in a volatile week for global markets as mixed ​signals over the US-Israel war on Iran left investors unsure about ‌its impact on inflation and growth. The crisis in West Asia kept investors on edge.

Nifty futures on the NSE International Exchange were 99.60 points, or 0.41 per cent, up at 24,294, hinting at a negative start for the domestic market on Wednesday. Asian shares steadied on Wednesday as markets remained anxious. KOSPI gained more than 3 per cent, while Nikkei jumped over 2 per cent. Hang Seng inched up nearly three-fourth a per cent.

Markets reacted to global cues as investor sentiment improved following signs of potential de-escalation in the ongoing West Asia conflict, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Markets may remain sensitive to developments in West Asia and movements in crude prices, while global macro cues will continue to guide overall risk sentiment."

US stocks lost steam on Tuesday as investors weighed fading hopes for an earlier-than-expected end to the US-Israel ‌war on Iran. The Dow Jones Industrial Average fell 34.29 points, or 0.07 per cent, to 47,706.51; the S&P 500 lost 14.51 points, or 0.21 per cent, to 6,781.48 and the Nasdaq Composite gained 1.16 points, or 0.01 per cent, to 22,697.10.

Oil prices dropped on ​Wednesday amid reports that the International Energy ​Agency has ​proposed the largest release ⁠of oil reserves ​in its history ​to bring down crude prices. Brent crude futures swung between gains and losses to trade 0.2 per cent higher at $87.89 per barrel, while US crude was ​little changed at $83.47 a barrel, having initially fallen on the news.

The dollar held its ground on Wednesday as traders moved to the sidelines, awaiting ​cues on what comes next in the US-Israeli war with Iran while mixed messages on a resolution to the conflict ‌ kept sentiment frail. The dollar index was at 98.876, inching away from the three-month top hit on Monday.

Investor sentiment improved slightly as global markets stabilized and crude oil prices cooled from their recent spike, which had earlier triggered concerns over inflation and economic growth. Expectations of easing geopolitical tensions in the Middle East and supportive cues from global equities also aided the recovery in domestic markets, said Ajit Mishra, SVP of Research at Religare Broking.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,672.64 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,333.26 crore on a net-net basis.  

Nifty50 & Sensex outlook

The market held positive momentum and it is forming a reversal pattern, which supports a further uptrend from the current levels on intraday charts. The market remains weak, but as long as it trades above 24,000-24,100/77,500-77,700 in the short term, a pullback move is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"On the higher side, 24,450-24,500/78,800-79,000 would be the immediate resistance zone for the bulls. Conversely, a breach of 24,000/77,500 could change the sentiment. Below that, the chances of hitting 23,900-23,850/77,300-77,200 would increase," he added.

Nifty is approaching the 24,350–24,400 zone, which earlier acted as a strong support and has now turned into an immediate resistance band, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities. "It continues to trade below both the 20-DEMA and the 200-DEMA, keeping the near-term undertone cautious, while the RSI has rebounded from the oversold zone but remains below 40, indicating momentum is still rebuilding."

Nifty extended its pullback amid strong global cues. The short-term trend remains weak, with the index below key moving averages, said Nandish Shah, Deputy Vice President at HDFC Securities. "On the higher side, immediate resistance is placed in the 24,300-24,415 band while 24,000 is likely to act as immediate support."  

Nifty Bank outlook

Nifty Bank outperformed frontline indices and it is still trading below its crucial moving averages. The 200-day EMA zone of 57,400-57,500 will act as an important hurdle, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "Any sustainable move above 57,500 will lead to extension of pullback rally upto the 58,100 level. On the downside, the zone of 56,600-56,500 will act as immediate support."

Nifty Bank is expected to test its 200-DMA resistance placed near 57,500. Sustaining above this level could lead to further recovery, said Vatsal Bhuva, Technical Analyst at LKP Securities. "However, a stronger bullish view would emerge only after the index reclaims its 50-DMA. Until then, a cautious stance is advisable with support at 56,200 and resistance at 57,500."

Nifty Bank is likely to consolidate and form a base in the range of 55,500-57,700. The daily oscillators are placed at an oversold territory which signals a pullback in the coming sessions. Failure to hold above 55,500 levels will lead to extension of the decline towards 54,300-54,000 levels in the coming sessions, said Bajaj Broking.