Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty up 38 points; key levels to watch

Indian equity markets are expected to remain cautious despite breaking their recent losing streak, as elevated crude oil prices and renewed global risk aversion continue to weigh on sentiment. The treasury-driven relief that supported markets on Thursday proved short-lived, with US equities falling sharply overnight as bond yields reversed their earlier decline.

Indian equities are expected to remain sideways with a marginal recovery bias, supported by value buying after seven consecutive sessions of decline and firm global cues. Broader market action and sector-specific opportunities are likely to remain in focus, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 38 points, or 0.16 per cent, up at 24,331, hinting at a muted start for the domestic market on Friday. Most Asian share indices were heading for weekly falls on Friday as stress in global bond markets showed little sign of abating. Nikkei tumbled nearly a per cent, while Hang Seng and KOSPI crept higher.

The main US indices closed lower on Thursday as ​rising Treasury yields dented risk appetite while disappointing results from Walmart soured investors' mood. The Dow Jones Industrial Average fell 703.84 ​points, or 1.32 per cent, to 52,759.21, the S&P 500 lost 66.82 points, or 0.87 per cent, to 7,641.16 and the Nasdaq Composite dropped 263.92 points, or 1.00 per cent, to 26,067.17.

Crude, US dollar, gold & more
Brent futures were last off 0.7 per cent at $93.12 a barrel, but still up more ​than 5 per cent for the week, while US ​crude eased 0.7 per cent to $86.18 a barrel. The threats further dimmed hopes for a deal. The dollar index was off almost 0.9 per cent for the week at 98.802. The yellow metal was steady at $4,513 an ounce, having climbed 3.1 per cent for ​the week so far.

Investor sentiment improved following stabilisation in global bond markets after the US Treasury announced measures to increase buybacks of long-duration debt, easing concerns over rising yields, said  Ajit Mishra, SVP of Research at Religare Broking. "We recommend maintaining a cautious stance on the index and focusing on selective stock-specific opportunities."

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 583.36 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 3,537.71 crore on a net-net basis.

Nifty50, Sensex & VIX outlook
From a level's perspective, 24,150 is an immediate crucial support, followed by a stronger cushion at 24,040–24,000. On the upside, immediate resistance is likely to emerge in the 24,250–24,350 band, followed by a stronger hurdle at the 24,400–24,450 zone, said Hitesh Rathi, Technical Analyst -Equity & Derivatives at Angel One.

"Markets may continue to exhibit a tentative and cautious stance, with no clear indication of the immediate direction. Following the strong up move witnessed across the broader market as well as the frontline indices, some stocks are now showing signs of profit booking. Participants should continue to adopt a cautious approach and remain highly selective in their stock-specific approach," he said.

The Sensex formed a bullish green candle after three consecutive red candles, indicating a meaningful recovery in sentiment. It opened sharply higher and found support near the previous day's resistance around 77,400, before closing above its 50-Day EMA, which improves the short-term structure. The 100-Day EMA is the nearest important resistance, said Sachin Gupta, VP of Technical Research at Choice Equity Broking.

"The broader outlook remains sideways, although today's strong rebound has provided some relief after the recent corrective phase. Sustaining above the 77,000–77,365 support zone will be important for preserving the recovery, while a decisive breakout above 77,720–78,000 could open the door for further upside," he said.

Momentum is improving, with the RSI recovering to 48.33 from lower levels, though it remains below its RSI average of 55.27, suggesting that the reversal is still in its early stage. Meanwhile, India VIX declined sharply to 10.76, supporting improved risk sentiment, said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.

Nifty Bank outlook
Nifty Bank continued to trade within a narrow range over the past few sessions, indicating a lack of directional momentum. The key moving averages remain flat, while momentum indicators and oscillators are also suggesting a sideways trend in the near term, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going forward, the 57,800-57,900 zone is likely to act as a key resistance, while 57,100-57,000 remains an important support area. A decisive breakout above 57,900 or a breakdown below 57,000 could trigger a strong trending move and set the tone for the index's next directional phase," it added.

Nifty Bank formed a doji candle with a long upper shadow signaling selling pressure at higher levels. However, it formed a higher high and a higher low and a bullish gap below its base highlighting pullback from the oversold territory. The index may extend the current consolidation and only a breakout or breakdown will signal a directional momentum, said Bajaj Broking Research.

"Within the consolidation it is facing resistance around 57,500-57,800. Index sustaining below the same will open down side towards 56,500-56,200, being the confluence of 200 days EMA and the lower band of the broader consolidation range. On the higher, side a move above 57,800 will open up side towards 58,200 and 58,700 levels in the coming weeks," it added.