Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty flat; key levels to watch

Indian equity benchmark indices are set for a muted open on Wednesday, as investors pause after a three-day rally fuelled by a drop in crude oil prices ​following the US-Iran peace deal, while caution emerged ahead of the Federal ‌Reserve's policy decision. The Fed is widely expected to keep interest rates unchanged.

Indian equities are expected to maintain their gradual positive momentum, supported by improving geopolitical developments, a revival in foreign institutional participation and a further fall in crude oil prices, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Progress towards a potential US-Iran peace agreement has significantly improved global sentiment."

GIFT Nifty, Asian markets & US stocks
GIFT Nifty Futures on the NSE International Exchange were 5 points, or 0.02 per cent, up at 24,002, hinting at a muted start for the domestic market on Wednesday. Asian stocks were trading mixed in early trade. Nikkei was up half a per cent, while KOSPI was marginally up. Hang Seng edged lower.

The Nasdaq Composite and the S&P 500 finished lower on Tuesday, while the Dow Jones marked its second straight record close. The Dow Jones Industrial Average rose 328.64 points, or 0.64 per cent, to 51,999.67, the S&P 500 lost 42.94 points, or 0.57 per cent, to 7,511.35 and the Nasdaq Composite shed 307.60 points, or 1.15 per cent, to 26,376.34.

Crude, US dollar, gold & more
Brent crude futures dived below $80 to the lowest ‌since the opening salvos of the US-Iran conflict in March. Bond ​yields dipped and rates in Asia followed suit. Gold edged higher on Wednesday as optimism around the US-Iran peace deal eased concerns over ​interest rate hikes. Spot gold was up 0.4 per cent at $4,348.93 per ounce. The dollar eased on Wednesday with the dollar index falling to 99.53.

Investors continued to monitor developments related to the formalisation of the peace agreement and trends in global markets, said Ajit Mishra, SVP of Research at Religare Broking. "We recommend favouring relative outperformers while also booking profits on rallies until there is clearer confirmation of a sustained trend reversal," it added.

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 749.18 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) remained buyers of Indian equities to the tune of only Rs 0.06 crore on a net-net basis.

Nifty50 & Sensex outlook
The market held positive momentum and formed a small bullish candle and is also maintaining a higher bottom formation on intraday charts, which supports a further uptrend from the current levels.  The intraday market trend is upward, but a fresh rally can only be expected after the 24,000/77,000 level is surpassed, said Shrikant Chouhan, Head Equity Research, Kotak Securities.

"Post the 24,000/77,000 breakout, the market could move up to 24,100–24,200/77,300-77,500. On the flip side, 23,850/76,500 and 23,800/76,300 would act as key support zones for day traders. Below 23,800/76,300, the uptrend would become vulnerable. If the market falls below this level, traders may prefer to exit their long positions," he added.

Sensex continues to exhibit positive momentum after reclaiming key support levels. Immediate resistance is placed at 77,300, followed by 77,400, while the 76,300–76,400 zone is a strong support area, said Aakash Shah, Research Analyst at Choice Equity Broking.  "A sustained move above the resistance band could trigger upside momentum, whereas the support zone is likely to attract buying interest on any corrective decline."

Nifty has been sustaining above the 20 EMA, indicating a positive short-term trend. The near-term sentiment continues to be positive; however, the upside may remain limited, with choppy price action likely to persist, said Rupak De, Senior Technical Analyst at LKP Securities. On the higher side, immediate resistance is placed in the 24,070–24,200 zone, where the Nifty may encounter selling pressure. On the downside, immediate support is placed at 23,900, followed by 23,700."

Nifty Bank outlook
Nifty Bank has formed a small body candle with shadows on either side, which shows indecisiveness. However, it is trading above its short and long-term moving averages. The daily RSI is quoting above 60 mark and it is in rising mode, said  Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the zone of 57,700-57,800 is likely to act as an immediate hurdle for the index. A decisive move above 57,800 could trigger a fresh round of buying, paving the way for an upside rally towards the 58,500 in the short term. On the downside, the zone of 56,800-56,700 remains a crucial support area, and holding above this range will be essential to maintain the positive bias," he said.

Nifty Bank formed a doji candlestick pattern which mostly remained contained inside previous session price range signaling consolidation for the second session in a row amid stock specific action. It has seen a strong rally of 4,800 points in the just 10 sessions, hence some consolidation cannot be ruled out in the coming sessions, said Bajaj Broking Research.

Nifty Bank may maintain overall positive bias and head towards 58,300 in the coming sessions being the measuring implication of the last four-week range breakout. it sustaining above 55,500-56,000, will keep the overall bias positive and any dips should be viewed as buying opportunities. Only a decisive breach below the 55,500-support level would negate the positive outlook," it adds.