Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 37 pts; key levels to watch

Indian equity benchmark indices set to open on a weak note as investor sentiment is likely to remain cautious as escalating geopolitical tensions in the Middle East continue to cloud the global risk environment, with market participants closely assessing the risk of a broader regional conflict and its potential impact on global energy supplies. 

Indian equities are expected to witness a gradual uptrend next week, on the back of a strong earnings season, which is likely to remain the key driver for stock-specific performance, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "With several index heavyweights reporting earnings over the weekend, investor focus will remain on commentary and earnings." 

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 36.70 points, or 0.15 per cent, down at 24,285, hinting at a muted start for the domestic market on Monday. Asian share markets were hesitant on Monday as the escalating ​conflict in the Gulf lifted oil prices and fanned fears of inflation. Nikkei and Hang Seng crashed nearly 4 per cent each, while Hang Seng inched higher.

Wall Street extended its decline on Friday as a pullback on stocks associated ​with the AI boom, which has driven many of the gains so far this year, morphed into a larger risk-off sentiment. The Dow Jones Industrial Average 0.77 per cent to 52,146.42, the S&P 500 ​1.01 per cent to 7,457.69 and the Nasdaq Composite tanked 1.40 per cent to 25,520.24.

Crude, US dollar, gold & more
The ​US dollar index was up 0.1 per cent at 100.84. Brent crude climbed 3 per cent to cross $90 a barrel for the first time in more than a month as the US military started a ninth straight day of attacks against Iran, which in turn struck targets across the region. In commodity markets, the rise in yields pressured non-interest-paying gold which fell 0.6 per cent to $3,993 an ounce.

Elevated geopolitical uncertainty, volatility in crude oil prices, and evolving global monetary policy expectations are likely to keep market volatility elevated over the near term, said Ajit Mishra, SVP of Research at Religare Broking. The medium-term outlook remains positive, offering opportunities to gradually accumulate quality stocks declines over aggressively chasing higher prices, he said.

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 376.41 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 1,017.89 crore on a net-net basis.

The shift in the stance of FPIs towards India, which turned positive beginning early July, is continuing. This is a positive development. India’s improving macros and stability in the rupee have contributed significantly to this pivot in FPI flows, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

Nifty50 & Sensex outlook
The market found support near the 20-day SMA, around the 24,000/77,000 levels during the week. It witnessed a sharp rebound on Friday, which is a positive sign. The market has formed a bullish candle on the weekly charts and is maintaining a higher-bottom formation on the daily charts, supporting the possibility of a further uptrend,s aid Amol Athawale, VP of Technical Research at Kotak Securities.

"The 24,000/77,000 level and 24,200/77,600 will act as crucial trend-deciding levels for positional traders. As long as the market trades above these levels, the bullish sentiment is likely to continue," he said. "The rally could extend towards the 24,500–24,800/78,500–79,400 range. On the flip side, if the market falls below 24,000/77,000, the sentiment could turn negative. Below this level, traders may prefer to exit their long trading positions."

Sensex has decisively crossed above its 100-Day EMA, which signals improving market strength. The index is trading comfortably above its 20-Day and 50-Day EMAs, confirming that the short-term trend has turned bullish, although it continues to trade below the 200-Day EMA, which remains the next key hurdle, said Sachin Gupta, VP of Technical Research at Choice Equity Broking.

"Immediate support is placed in the 77,300–77,400 zone, while 78,900–79,000 will act as the immediate resistance range. The expected trading range remains 77,300–79,000, with the overall bias shifting from sideways to bullish, indicating that the market is gradually building strength for a potential upside move," he said.

Nifty remains positive as the index continues to trade above its critical moving averages. Additionally, the RSI has entered a bullish crossover, reinforcing the positive momentum, said Rupak De, Senior Technical Analyst at LKP Securities. "It may remain strong,with the potential to advance to 24,800 in the near term. immediate support is placed at 24,200 on the downside."

Nifty Bank outlook
Nifty Bank has confirmed a breakout above its six-day the daily chart. It also held firmly above its 20-day EMA, keeping the broader bullish trend intact, said Sudeep Shah of Head of Technical and Derivatives Research at SBI Securities. "Going ahead, the immediate resistance for Bank Nifty is placed in the 58,700-58,800 zone, which coincides with its previous swing high zone."

Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 59,200, followed by 59,600 in the short term. On the downside, the immediate support for Bank Nifty is placed in the 58,100-58,000 zone, Shah adds.

Nifty Bank continues to trade comfortably above its key moving averages, reinforcing the prevailing bullish trend. It is displaying relative strength compared to the broader market, while the RSI at 58 indicates room for further upside, said Dr Ravi Singh, Chief Research Officer at Master Capital Services. 

"Immediate support is placed at 58,000, and any dip towards this level is likely to attract fresh buying interest. The crucial support zone stands at 57,400-57,500. On the upside, 59,250 and 59,800 remain the next key resistance levels, favouring a buy on dips approach," he added.