Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 140 pts; key levels to watch

Indian equity benchmark indices are poised to open lower on Thursday as a surge in oil prices weighed on market sentiment, potentially outweighing ​stock-specific earnings-led gains. Higher oil prices raise inflation risks for India as well as pressure economic growth and ​corporate earnings.

Markets are expected to react to the domestic political developments, as exit polls after the second phase of state elections are due later this evening. Investor sentiment will be influenced by these outcomes, while the final results next week are likely to add to market volatility, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
 

GIFT Nifty, Asian markets & US stocks

GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 139.50 points, or 0.58 per cent, down at 24,112.50, hinting at a negative start for the domestic market on Thursday. AI-related shares fared well in Asia on Thursday after a raft of generally positive ‌earnings reports. Nikkei and Hang Seng shed 1.25 per cent each, while KOSPI fell 0.25 per cent in early trade.

Wall Street oscillated on Wednesday, as investors juggled spiking crude prices, ​the US Federal Reserve's interest-rate decision, and a quartet of high-profile earnings released after the closing bell. The Dow Jones Industrial Average fell 0.57 per cent to 48,861.81, the S&P 500 lost 0.04 per cent to 7,135.98 and the Nasdaq Composite gained 0.04 per cent to 24,673.24.
 

Crude, US dollar, gold & more

The US dollar popped up with higher yields, hovering near its highest level in more than two weeks. The dollar index was steady at 98.852, hovering near the highest level since April 13. Gold prices rebounded on Thursday from a one-month low hit the day before, helped by a softer US dollar. Spot gold ‌was up 0.6 per cent at $4,566.73 per ounce.

Oil prices extended gains on Thursday on concerns supply from the key Middle East producing region will remain bottled up for longer as talks to end ​the US-Israeli war against Iran have deadlocked. Brent crude futures for June rose $1.91, or 1.62 per cent, ‌to $119.94 a barrel. US West Texas Intermediate futures for June were up 63 ​cents, or 0.59 per cent, at $107.51 a barrel.

The up move was primarily driven by optimism around earnings announcements and buying interest in select heavyweights across sectors, said Ajit Mishra, SVP of Research at Religare Broking. "Markets will react to the outcome of the US Fed meeting in early trade on Thursday. We continue to recommend a stock-specific approach based on sectoral strength."
 

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,468.42 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,262.17 crore on a net-net basis.
 

Nifty50 & Sensex outlook

The market witnessed profit booking at higher levels after a promising intraday rally. However, the short-term outlook of the market remains positive. The short-term trend is still in a positive zone, but a fresh uptrend rally is possible only after the index surpasses 24,215/77,800 or the 50-day SMA, said  Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"Once this level is crossed, the market could retest the level of 24,315/78,100. Further upside may also continue, potentially lifting the index to the 24,450-24,500/78,500-78,700 range. On the downside, if the index falls below 24,100/77,200, market sentiment could turn negative. Below this level, the index could slip to the 23,900-23,850/76,500-76,300 range," it added.

Nifty50 rallied above the 50EMA but failed to sustain above it on a closing basis. It held above the support level of 24,150 on the daily timeframe. The RSI is on the verge of re-entering a bullish crossover on the daily chart, said Rupak De, Senior Technical Analyst at LKP Securities. "The overall sentiment remains unclear, with the possibility of the trend turning in either direction."

During the session, Nifty decisively broke above its key 50 DEMA resistance at 24,195, but profit-booking in the afternoon reversed those gains, leaving the index to close below it, said Nandish Shah, Deputy Vice President at HDFC Securities. "Immediate support holds firm at 23,800, while today's high of 24,334 now acts as immediate resistance."
 

Nifty Bank outlook

Nifty Bank formed a small body bearish candle with a noticeable upper wick and a small lower wick, highlighting its continued inability to hold higher levels. It has rallied intraday but failed to sustain, resulting in prominent upper wicks on the charts, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate support for Bank Nifty is placed in the 55,000-54,900 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 54600, followed by 54,300 in the short term. On the upside, the zone of 55,900–56,000 zone is likely to act as an immediate resistance," he adds.

Nifty Bank formed a small bearish candlestick pattern which mostly remained contained inside previous session price range signaling consolidation with corrective bias, said Bajaj Broking. "We expect the Bank Nifty to extend consolidation in the broad range of 54,500-57,500 amid stock specific action as we progress through the quarterly earning session of the banking stocks."

Within the consolidation only a move above 56,475 will open further upside towards the 57,000 and 57,500 levels in the coming sessions. From a short-term perspective, support is placed in the range of 54,500–54,000 zone, being the confluence of the recent low and 38.2 per cent retracement of the last 3 weeks pullback, Bajaj Broking adds.