Nifty, Sensex, Nifty Bank outlook for today: GIFT Nifty up 10 points; key levels to watch

Indian equity benchmark indices are headed for a muted start on Wednesday after recent selloff at Dalal Street amid the feeble global cues led by inflation concerns globally. Sentiment remains cautious as the crude oil prices remain firm above $100 per barrel, following uncertainty elevated around the Strait of Hormuz and broader global energy supplies.

Indian markets extended losses as the lack of progress in US-Iran negotiations continued to create nervousness across global markets. Escalating tensions in West Asia have heightened fears of a prolonged geopolitical conflict, keeping investors risk-averse and triggering sustained selling across financial markets, 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 9.8 points, or 0.04 per cent, up at 23,434.50, hinting at a flat start for the domestic market on Wednesday. Stocks started the Asian session on the ​back foot on Wednesday. Nikkei and KOSPI inched up, while Hang Seng was trading in red.

US stocks settled mostly lower on ​Tuesday, easing from record highs as hotter-than-expected inflation data and increasing tensions between the US-Iran. The Dow Jones Industrial Average rose 0.11 per cent ​to 49,760.56, the S&P 500 lost 0.16 per cent to 7,400.96 and the ⁠Nasdaq Composite shed 0.71 per cent to 26,088.20.
 

Crude, US dollar, gold & more

Brent crude slipped 0.6 per cent ​to $107.13. Oil prices have held at or above $100 a barrel since late February, when US and Israeli strikes on Iran and Tehran's effective closure of ‌the Strait ⁠of Hormuz rattled supply. The US dollar index held steady at 98.322, marking its third consecutive day of gains. Gold was up 0.1 per cent at $4,718.4805, while bitcoin was 0.2 per cent lower at $80,508.37.

Weakness was driven by rising geopolitical tensions in the Middle East after uncertainty surrounding the US-Iran negotiations intensified. Persistent FII outflows and elevated global bond yields further weighed on sentiment, said Ajit Mishra, SVP of Research at Religare Broking. "Traders can continue to explore selective shorting opportunities across relatively weaker sectors and stocks."
 

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,959.39 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 7,990.32 crore on a net-net basis.
 

Nifty50 & Sensex outlook

The market registered selling pressure at higher levels. It has formed a bearish candle on daily charts and is also showing a correction continuation pattern on intraday charts, which is largely negative. The intraday market texture is weak, but oversold conditions suggest a strong possibility of a quick pullback rally, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"For day traders, 23,500/74,800 would act as a key resistance zone. Below this, we could expect the correction continuation pattern to extend till 23,250-23,150/74,000-73,700. On the flip side, above 23,500/74,800, the pullback move could extend up to 23,600-25,650/75,000-75,300," he added.

Nifty breached its crucial support at 23,500 levels and is sustaining below the same. The broader structure has turned bearish, indicating further weakness in the near term, with the index likely to move towards the gap area placed near 23,150 levels, said Nilesh Jain, VP & Head of Technical and Derivative research at Centrum Finverse.

Sensex slipped below key short-term support levels. Immediate support is now placed in the 73,800–74,000 zone, which is likely to act as a crucial demand area in the coming sessions, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking. The resistance is seen around 75,000–75,200 on the upside, where recovery attempts may continue to face selling pressure and profit booking.
 

Nifty Bank outlook

Nifty Bank witnessed a sharp correction, marking its third consecutive session of losses. It is trading below its key moving averages, indicating a weakening trend structure. The daily RSI has slipped below the 40 mark for the first time since April, highlighting a clear shift in momentum in favour of the bears, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going forward, the 54,100–54,200 zone is likely to act as a significant resistance for the index. As long as Bank Nifty remains below the 54,200 level, the prevailing downtrend is expected to continue, with the index likely to drift towards 53,000 in the near term, followed by a potential decline towards the 52,500 level," he said,

Nifty Bank confirmed a Head and Shoulder pattern breakdown, indicating weakening price structure. The index has breached an important support zone with a decisive breakdown on the daily chart as well, highlighting increasing bearish pressure, said Vatsal Bhuva, Technical Analyst at LKP Securities.

"Momentum indicators also remain weak, as RSI has entered a bearish crossover, signaling lack of buying strength. The overall outlook remains negative and a sell-on-rise strategy should be maintained. Level-wise, support is placed at 53,200, while resistance is seen near 54,200. The index may further extend its decline and test the 52,700 zone in the near term," he adds.