Stock market today: Gift Nifty down 55 pts; key levels to watch for Nifty, Sensex & Nifty Bank

Indian benchmark indices are poised open lower on Thursday, weighed down by escalating geopolitical tensions between Iran and Israel, with the potential involvement of the US adding to investor anxiety. Meanwhile, the US Federal Reserve has kept interest rates unchanged, but its cautionary stance on persistent inflation could further dampen market sentiment.

Nifty futures on the NSE International Exchange traded 54.40 points, or 0.22 per cent, lower at 24,772.50, hinting at a muted start for the domestic market on Thursday. Stock markets in Asia edged lower on Thursday. Hang Seng crashed 1.15 per cent in early trade. Nikkei tanked 0.73 per cent, while KOSPI was down nearly half a per cent.

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services expects Thursday’s session to be guided by global cues including the Fed policy outcome and developments on the geopolitical front. Benchmark indices are anticipated to remain range-bound, with possible rotation toward defensive sectors amidst global uncertainty.

The US stocks ended nearly mixed on Wednesday after the US Fed signaled a rise in inflation. The Dow Jones Industrial Average fell 44.14 points, or 0.10 per cent, to 42,171.66, the S&P 500 lost 1.85 points, or 0.03 per cent, to 5,980.87 and the Nasdaq Composite gained 25.18 points, or 0.13 per cent, to 19,546.27.

The dollar held steady on Thursday, as investors weighed Federal Reserve Chair Jerome Powell's cautionary tone on inflation. The dollar index was at 98.957 and set for its strongest weekly performance since late February. US markets are closed on Thursday for the federal Juneteenth holiday.

Oil prices fell on Thursday as investors hesitated to take new positions after US President Donald Trump gave mixed signals on the country's potential involvement in the ongoing Israel-Iran conflict. Brent crude edged down to $76.32 per barrel, but remained not far from the four-and-a-half month peak of $78.50 reached on Friday. Gold advanced 0.3 per cent to $3,378 per ounce.

Markets will react to the outcome of the US Fed policy meeting during early trades on Thursday, said Ajit Mishra, SVP of Research at Religare Broking. "We recommend maintaining a cautious approach until there is more clarity. In the meantime, participants can consider selectively accumulating stocks that are showing relative strength amid the volatility," he said.

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs  890.93 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) remained buyers of Indian equities to the tune of Rs 1,091.34 crore on a net-net basis.

Nifty & Sensex outlook

Nifty closed below the crucial support level of 24,850. However, a positive surprise from the Fed could lift both global and domestic markets, helping them shake off prevailing negativity, said Rupak De, Senior Technical Analyst at LKP Securities. A decisive reclaim of 24,850 may trigger a rally towards 25,000 and higher, while a failure to move back above this level could drag Nifty down towards 24,500."

Nifty/Sensex has formed indecisive patterns at equilibrium levels on daily charts that indicate temporary weakness. We believe that as long as the market is trading below 24,800/81,400, the weak sentiment is likely to continue, said Shrikant Chouhan, Head Equity Research at Kotak Securities.

"On the downside, 24,725/81,250 would be the immediate support zones for traders. Below this, the market could slip to 24,500/80,600. On the flip side, above 24,900/81,850, the sentiment could change. If it moves above this level, it could rally up to 25,000-25,100/82,100-82,500," he said.

Nifty Bank outlook

Going ahead only a sustained close above the 56,000 mark could pave the way for further upside towards the 56,600 and 57,000 levels. However, inability to surpass this hurdle may result in continued range-bound price action between 56,000 and 55,000, with a likely shift in focus to stock-specific moves, said Bajaj Broking.

Nifty Bank formed a small-bodied candle after taking support near the rising trendline, said Om Mehra, Technical Research Analyst at SAMCO Securities. "The daily RSI reflects a cautious undertone.  The overall formation suggests that the index is caught between a rising support trendline and a falling resistance trendline, forming a short-term contraction," he said.