Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty down 55 points; key levels to watch

Indian equity benchmark indices are set to open on a weak note on Wednesday led by a broader risk-off mood across global assets as surging crude oil prices and rising global bond yields continue to weigh on investor sentiment amid the escalating conflict in the Middle East. While India's resilient domestic growth outlook provides an underlying cushion.

Indian equities are likely to maintain a cautious bias amid continued US-Iran tensions and institutional selling. Brent crude rose, increasing concerns over inflation and energy supply disruptions, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Investors will track US labour-market data due later today, for cues on the Federal Reserve's rate trajectory," he said.

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 53.80 points, or 0.22 per cent, down at 24,036.50, hinting at a negative start for the domestic market on Wednesday. Stocks slumped at the start of the Asian trading session on Wednesday after renewed attacks by the US on Iran pushed ‌oil prices higher. KOSPI and Nikkei plunged 3 per cent each, while Hang Seng plunged a per cent.

US stocks extended their slide on Tuesday, as the ​global bond selloff deepened and crude prices spiked amid fading hopes for a near-term solution for the West Asia conflict. The Dow Jones Industrial ​Average shed 418.97 points, or 0.79 per cent, ⁠to 52,766.93, the S&P 500 lost 54.67 points, or 0.71 per cent, to 7,631.47 and the Nasdaq Composite fell 271.11 points, or 1.03 per cent, to 26,099.77.

Crude, US dollar, gold & more
Brent crude futures extended gains, rising 0.7 per cent to $95.34 a ⁠barrel after the US launched a barrage of airstrikes on Iran, which pushed oil prices. The yield on the US ​10-year Treasury bond was up 0.4 basis point at 4.798 per cent as the US ​dollar index held near the two week highs at 99.67. Gold was flat at $4,328.59 an ounce, while bitcoin slipped 0.2 per cent to $77,246.57.

The rebound was primarily driven by stronger-than-expected GDP numbers despite the uncertainty outside India, said Ajit Mishra, SVP of Research at Religare Broking. "We recommend continuing with 'sell on rise' in the Nifty and maintaining a stock-specific approach based on the sectoral performance, while adhering to strict risk and position management," he added.

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,143.38 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 1,846.94 crore on a net-net basis.

Nifty50, Sensex & India VIX outlook
Sensex continues to face resistance at higher levels while remaining below its key moving averages. Holding the 76,400–76,600 support zone will be crucial to limit further downside, whereas a sustained move above 77,300–77,500 could improve the short-term structure. It is likely to remain volatile and range-bound, said Sachin Gupta, VP of Technical Research at Choice Equity Broking.

The underlying trend of Nifty continues to be down amidst choppy movement. The market has failed to show sustainable recovery from near the crucial support of around 24,000, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. "Weakness from here could drag Nifty down to the next lower support of 23,800. Any bounce above 24,150 may open more upside in the short term."

India VIX remained subdued near 11.49, indicating that volatility expectations continue to remain contained despite the weak market structure, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

Nifty Bank outlook
Bank Nifty formed a high wave candle with small real body and long shadows in either direction signaling consolidation around the 50 days EMA. The broader consolidation range remains intact between 56,500 and 58,700. It may extend the consolidation and a breakout or breakdown will signal a directional momentum. Within the consolidation, it is facing resistance around 58,000, said Bajaj Broking.

"Nifty Bank sustaining above 58,000 will open upside towards 58,500-58.700. Failure to sustain above 58,000 will signal consolidation in the 57,000-58,000 range in the coming sessions. On the lower side a breach below immediate support of 57,000 will signal extension of decline towards the key short-term support area of 56,500-56,200," it added.

The technical setup continues to indicate a consolidation phase, with key momentum indicators and oscillators pointing towards a sideways market structure, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "The 57,900-58,000 zone is likely to act as an immediate resistance area. On the downside, the 57,000-56,900 zone remains an important support."