Stock market today: Gift Nifty down 9 points; key levels for Nifty, Sensex & Nifty Bank

Indian benchmark indices are likely to open on a muted note, following a sharp sell-off in the global markets amid the rising geopolitical tension in the Middle East. Traders will be looking at the global cues and key economic data for further cues, whereas AI-concerns loom over IT stocks.

Nifty futures on the NSE International Exchange were down 9 points, or 0.04 per cent, up at 25,437, hinting at a muted start for the domestic market on Friday. Stocks fell in Asia on Friday as a US military build up in the Middle East. Nikkei and Hang Seng were down a per cent each.

Market sentiment turned cautious amid rising geopolitical tensions, concerns over a potential conflict between the US and Iran and speculation of possible military action over the weekend, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Investors will track key data releases tomorrow, including India’s Manufacturing and Services PMI, US CPI, and US Q4 GDP."

Wall Street ended lower on Thursday with losses in private equity companies. The S&P 500 declined 0.28 per cent to end the session at 6,861.89 points. The Nasdaq declined 0.31 per cent to 22,682.73 points, while the Dow Jones Industrial Average declined 0.54 per cent to 49,395.16 points.

The dollar was poised on Friday to cap its strongest weekly performance since October, buoyed by a run of better-than-expected economic data, a more hawkish Federal Reserve outlook and as tensions between the US and Iran kept markets on edge. Against a basket of currencies, the dollar hovered near Thursday's one-month peak and was last at 97.89.

Oil prices were higher on Friday as concern of conflict between the US and Iran ratcheted up, with Washington saying Tehran will suffer if it does not agree a deal about its nuclear activity within a matter of days. Brent crude futures rose 21 cents, or 0.3 per cent, to $71.87, while US West Texas Intermediate crude gained 23 cents, or 0.4 per cent, to $66.66.

Sentiment deteriorated due to a sharp surge in crude oil prices amid lingering geopolitical tensions between the US and Iran. The absence of any fresh positive domestic triggers further kept participants on the sidelines, said Ajit Mishra, SVP of Research at Religare Broking. "We suggest maintaining a cautious stance and waiting for signs of stability before initiating fresh positions."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 880.49 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned sellers of Indian equities to the tune of Rs 596.28 crore on a net-net basis.  

Nifty50 & Sensex outlook

This market action indicates a formation of 'Bearish Engulfing' pattern and also a faster retracement of previous four sessions range on the downside in single session, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. "The short term trend of Nifty has reversed down sharply. A slide below 25,400 could drag Nifty down to the next support of 25,200-25,100 levels in the near term."

Nifty slipped back below the 50 DMA as well as the 21EMA in one go. The 200 DMA is now positioned nearby and appears vulnerable, said Rupak De, Senior Technical Analyst at LKP Securities. "Follow-up selling could lead to a breakdown, which may reactivate the bearish trend. On the lower end, support is placed at 25,330/25,000, while on the higher end, resistance is seen at 25,650."  

Nifty Bank outlook

Nifty Bank formed a large bearish candle on the daily chart. This price action indicates a clear shift in momentum and suggests that bulls have temporarily lost control after a strong upward stretch, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Looking ahead, the 20 day EMA placed between 60,400-60,300 is expected to act as a key support zone for the index. A breakdown below this region could accelerate the downside, exposing the index to further declines in the short term. On the upside, the zone of 61,100–61,200 is likely to serve as a crucial resistance area," he said.

Nifty Bank witnessed sharp selling from the highs and eventually closed near the day’s low, reflecting sustained weakness throughout the session. The 21-day EMA, placed around 60,300, emerges as the key level to watch, as the index has found support near this average on multiple prior occasions, Bajaj Broking said.

"Immediate supports are seen at 60,300, followed by 60,000. On the upside, near-term resistance is positioned at 61,500 and 61,750. In the near term, the index is likely to trade within a broad range of 60,000–61,500, and a decisive breakout on either side could trigger fresh directional momentum," it said.