Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 50 pts; key levels to watch

Indian equity benchmark indices are likely to open on a muted note on Tuesday despite the improved sentiments in the global peers. Traders are awaiting a clear long-term solution for the West Asian crisis between the US and Iran, which shall keep the crude oil stable. Traders continue to remain in the wait-and-watch mode.

Indian equities are expected to remain volatile in the near term, with sentiment weighed down by escalating geopolitical tensions in West Asia, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “Commodity-led inflation, weaker monsoon expectations and sustained Foreign Institutional Investor outflows are likely to keep the near-term backdrop challenging.”


GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 49.60 points, or 0.21 per cent, up at 23,125, hinting at a negative start for the domestic market on Tuesday. Asian stock markets tried to stabilise on Tuesday, while ever-hopeful investors bought the ‌dip in semiconductor stocks. KOSPI soared more than 4 per cent, while Nikkei gained a per cent. Hang Seng was down half a per cent.

US stocks ended mostly higher on Monday, led by gains in the Nasdaq ​and chipmakers as investors sought bargains after Friday's sharp selloff. The Dow Jones Industrial Average fell 80.77 points, ‌or 0.16 per cent, ⁠to 50,786.01, the S&P 500 gained 21.99 points, or 0.30 per cent, to 7,405.73 and the Nasdaq Composite jumped 220.23 points, or 0.86 per cent, to 25,929.66.


Crude, US dollar, gold & more
In commodity markets, Brent crude eased 0.2 per cent to $94.08 a barrel, while US crude dipped 0.3 per cent ​to $91.06 a barrel. The US dollar held near a two-month high on Tuesday, firming against ​most major peers as Middle East uncertainty curbed risk appetite. The dollar index was little changed at 100.03. Gold slipped 0.3 per cent to $4,316 an ounce.

The sell-off was primarily triggered by a sharp correction in global equities and a spike in crude oil prices following renewed geopolitical tensions in the Middle East, said Ajit Mishra, SVP of Research at Religare Broking. “We prefer a sell-on-rise approach and traders should focus on stock-specific opportunities while maintaining strict risk and position management."


FII-DII Flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 5,555.67 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 5,165.24 crore on a net-net basis.


Nifty50, Sensex & India VIX
The market is holding a lower top formation on daily and intraday charts, which supports further weakness from the current levels. As long as the market is trading below 23,250/73,800, weak sentiment is likely to continue. 22,950/73,000 would be the immediate support zone on the downside, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

“Further downside may also continue, which could drag the market to 22,800/72,500. On the flip side, above 23,250/73,800, the pullback move could extend to 23,350–23,400/74,000-74,300. The intraday market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy for day traders,” he added.

Sensex managed to hold above the crucial 72,750–73,000 support zone, despite sharp intraday volatility. The recovery from the day's low indicates buying interest at lower levels. On the upside, the 73,900–74,000 zone remains an immediate resistance area, and a sustained move above this hurdle will be required to improve near-term sentiment, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking.
 
A small green candle was formed on the daily chart with an upper shadow. This market action indicates an attempt of breakdown of the important support, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. The underlying trend of Nifty is weak and a decisive move below the support 23,100 could open more weakness down to 22,700 levels in a quick period of time. Immediate resistance is placed at 23,250.

On the volatility front, India VIX surged 8 per cent to close around 17. A sustained move above the 18 mark could further elevate market uncertainty and keep volatility high in the coming sessions, said Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse.


Nifty Bank outlook
Nifty Bank remained volatile and the index formed a small-bodied candle with a prominent upper wick on the daily chart, reflecting profit booking and supply emerging at higher levels, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

“Going ahead, the immediate support for Bank Nifty is placed in the 53,600-53,500 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 53,100, followed by 52,700 in the short term. On the upside, the immediate resistance for Bank Nifty is placed in the 54,500-54,600 zone,” it added.

Bajaj Broking started the session with a bearish gap and formed an inverted hammer candlestick pattern with a shadow on upper side on the daily chart, signalling consolidation and selling from upper side. It is likely to consolidate within the broader range of 52,500–56,000. A decisive breakout above or breakdown below this range will provide the next directional move, said Bajaj Broking,

“While key support is placed at 53,000–52,500 zone being the confluence of the lower band of the bullish gap area and the 61.8 per cent retracement of the previous pullback (49,955-57,456). Resistance is placed at 55,200-55,600 levels being the confluence of the 50 days EMA and the upper band of the last three weeks consolidation,” it added.