Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty up 3 points; key levels & triggers to watch

Indian equity markets look set for a cautious start on Wednesday amid muted global cues and weakness in the Wall Street stocks. Surging crude oil prices and a sharp rise in the 10-year US Treasury yield, weighed on sentiment amid inflation concerns linked to the energy shock. All eyes now turn to the US Federal Reserve, which concludes its two-day policy meeting later today.

Indian equities are likely to remain weak amid elevated crude prices, renewed inflation concerns and uncertainty ahead of the US Federal Reserve’s policy decision, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. Unresolved geopolitical tensions and supply concerns, adding to inflationary pressures, he said.

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 3.10 points, or 0.01 per cent, up at 23,227, hinting at a flat start for the domestic market on Wednesday. Stocks made a mixed start to the Asian trading session on Wednesday. Nikkei and KOSPI edged lower, while Hang Seng gained marginally.

Wall Street stocks extended its selloff on Tuesday, as rising US Treasury yields, mounting debt concerns and soaring crude prices kept buyers on the sidelines. The Dow Jones Industrial Average ⁠fell 328.09 points, or 0.63 per cent, to 52,093.11, the S&P 500 lost 34.25 points, or 0.45 per cent, to 7,585.73 and the Nasdaq Composite tanked 204.84 points, or 0.78 per cent, to 25,981.57.

Crude, US dollar, gold & more
Oil prices slipped as trading resumed in Asia, with Brent crude futures down 0.6 per cent ⁠at $108.08 a barrel after rising on Tuesday. The US dollar ⁠index was trading near a two-week high at 99.656. The yield on the U.S. 10-year Treasury bond was 0.8 basis point lower at 4.9875 per cent in Asian trade. Bitcoin slid 0.1 per cent to $75,816.24, while ether slipped 0.2 per cent to $2,403.27.

Investor sentiment remained fragile as Brent crude sustained above $107 a barrel amid concerns over disruptions to global energy supplies, said Ajit Mishra, SVP of Research at Religare Broking. "We maintain a negative cautious stance on the index. "Participants should prefer hedged positions and consider booking partial profits in broader-market holdings, which outperformed recently."

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,977.86 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,686.05 crore on a net-net basis.

Nifty50, Sensex & India VIX outlook
A long bear candle was formed on the daily chart. This market action indicates a massive weakness emerging across the board, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. "The underlying trend of Nifty is sharply down. A decisive slide below 23,000 could drag Nifty down to the next lower area of 22,600-22,500 in the near term. Any pullback rally could find resistance at 23,300."

Sensex surrendered 74,500, and maintained a downward trajectory. The immediate support is placed at 73,500–74,000, while 74,800–75,000 is likely to act as the key resistance zone, said Sachin Gupta, VP of Technical Research at Choice Equity Broking. "The broader trading range stands at 73,500–75,000, with the index maintaining a sideways-to-bearish bias."

Market volatility intensified, with India VIX surging more than 9 per cent, signalling heightened risk perception among investors. Broader markets significantly underperformed the frontline indices, said  Sudeep Shah, Vice President of Technical and Derivatives Research at SBI Securities.

Nifty Bank outlook
Nifty Bank formed a sizable bearish candle on the daily chart as it opened higher but failed to move above 57,000 and gave up its entire gains to close deep in the red around the 56,000. It is currently placed around the lower band of the last 11-week range 56,000-58,700, said Bajaj Broking Research.

"A breach and close below last week low of 55,700 will signal extension of the corrective decline towards 55,200 and 54,800 in the coming sessions. Immediate bias in the Nifty Bank remains down below 57,000 and only a formation of higher high and higher low on a sustained basis in the daily chart and a close above 57,000 levels will signal a pause in the current down trend," it said.

Nifty Bank is indicating a weak chart structure and bearish sentiment. The RSI has witnessed a bearish crossover, supporting the negative setup, said Vatsal Bhuva, Technical Analyst at LKP Securities. "It continues to favour a sell-on-rise strategy. Immediate support is placed at 55,500, while positional support is seen in the 55,000–55,100 zone, On the higher side, resistance is positioned at 56,500."