Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 120 pts; key levels to watch

Indian benchmark indices are set to open lower on Tuesday, tracking the weakness in the global markets and the crude oil prices remaining firm above $100 mark. Traders shall be keenly awaiting geopolitical developments and India Inc earning for the cues in the near-term.

Markets are expected to sustain their gradual upmove, with near-term direction anchored around three key drivers — softer crude oil prices, strong domestic economic data, and political clarity post state election outcomes, 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 118.50 points, or 0.49 per cent, up at 24,087.50, hinting at a negative start for the domestic market on Tuesday. Stocks in Asia slid on Tuesday while oil prices eased. Hang Seng was down more than a per cent, while Australia lost over half a per cent.

Wall Street ended lower on Monday after a ​South Korean ship was hit by an explosion in the Strait of Hormuz and Tehran demonstrated its grip. The S&P 500 declined 0.41 per cent to end the session at 7,200.75 points. The Nasdaq declined 0.19 per cent to 25,067.80 points, while the Dow Jones Industrial Average declined 1.13 per cent to 48,941.90 points.
 

Crude, US dollar, gold & more

In oil markets, ​Brent crude futures fell 0.5 per cent to $113.85 a barrel while US crude slid 1.3 per cent to $105.03, having jumped in the previous session on heightened worries. Spot gold rose 0.2 per cent to $4,529.19 an ounce, trading well within recent ranges. The US dollar meanwhile firmed on safe-haven demand as the dollar index was steady at 98.452.

The initial upmove was primarily driven by cooling crude oil prices following signs of geopolitical relief in the Middle East, which supported global sentiment, said Ajit Mishra, SVP of Research at Religare Broking. "Traders are advised to maintain a sector- and theme-specific approach and prefer hedged strategies until clearer directional signals emerge."
 

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 2,835.62 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,764.16 crore on a net-net basis.
 

Nifty50 & Sensex outlook

Technically, the market witnessed profit booking at higher levels after a strong opening. However, it managed to close above the 24,000/77,000 mark, which is largely positive. The short-term texture of the market is non-directional and is likely to remain so in the near future, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"For day traders now, the 24,000/77,000 level and the 20-day SMA will act as key support zones. Above these levels, the market could continue its positive momentum towards 24,300–24,400/77,700–78,000. On the flip side, below the 20-day SMA or 23,950/76,800, the market could retest the levels of 23,800–23,750/76,500–76,300," it added.

The 24,000-23,900 zone is expected to provide immediate support in case of minor pullbacks, whereas the 23,800-23,750 range is likely to act as a strong and sacrosanct support base in the near term. On the upside, resistance is anticipated around 24,260-24,350, followed by a more formidable barrier near 24600, said Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One.

"Market dips are expected to be constructive for buyers, offering opportunities to gradually build long positions. Adopting a cautious stance at elevated levels appears prudent in the near term. With broader market participation improving, traders are advised to adopt a stock-specific approach to capitalize on relative outperformance opportunities while maintaining disciplined risk management," he adds.
 

Nifty Bank outlook

Nifty Bank formed a thin bodied candle with a clear upper wick, reinforcing the rejection at higher levels. The selling pressure coincided with the 20-day EMA, and the index’s failure to sustain above this key short-term moving average suggests underlying weakness in the near term, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate support for Bank Nifty is placed in the 54,400-54,300 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 53900, followed by 53,500 in the short term. On the upside, the zone of 55,300–55,400 zone is likely to act as an immediate resistance," it added.

Nifty Bank formed a small bear candle with a long upper shadow highlighting intraday volatility and selling pressure at higher levels. Overall, it expects the Nifty Bank to extend consolidation in the broad range of 54,000-57,500 amid stock specific action as we progress through the quarterly earning session of the banking stocks, said Bajaj Broking.

"Index has immediate support and 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 (49,955-57,456). A breach below the key support area of 54,000 will signal extension of the decline towards 52,500 levels," he added.