Nifty, Sensex, Nifty Bank outlook for today: Gift Nifty up 375 points; key levels to watch

Indian equity benchmark indices are set to open with gains on Tuesday, tracking gains in broader Asian peers, after US President Donald Trump postponed the bombing of ​Iran's power grid, easing fears of a deeper energy crisis. Trump said that he had ordered the military to postpone strikes against Iranian power ​plants, while Tehran has refuted any negotiations with the US.

Nifty futures on the NSE International Exchange were 374.10 points, or 1.66 per cent, up at 22,889, hinting at a positive start for the domestic market on Tuesday. Asian stocks rallied on Tuesday after US President Donald Trump postponed the ‌ bombing of Iran's power grid. KOSPI and Hang Seng rose more than a per cent each, while Nikkei was up nearly a per cent.

Markets appear to be navigating a phase of heightened stress, with sentiment increasingly dictated by geopolitical developments and energy price volatility, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Market conditions are likely to remain fragile, with elevated volatility and downside risks persisting in the near term."

US stock indices ended Monday's session up after President Donald Trump ordered the military to postpone strikes against Iranian power plants. The Dow Jones Industrial Average rose 631 points, or 1.38 per cent, to 46,208.47 while the S&P 500 gained 74.52 points, ​or 1.15 per cent, to 6,581.00 and the Nasdaq Composite jumped 299.15 points, or 1.38 per cent, to 21,946.76.

Oil prices rose in early trade on Tuesday on ​supply fears as Iran denied it had held talks with the United States to end the war in ‌the Gulf, contradicting President Donald Trump. Brent futures rose $1.06, or 1.1 per cent, to $101 a barrel, while US West Texas Intermediate (WTI) climbed $1.58, or 1.8 per cent, to $89.71.

In currencies, the US dollar was on the back foot after falling on Monday, as a pick up in risk sentiment reduced demand for the safe haven currency. The dollar index rose nearly 0.2 per cent to 99.35 after dipping to near ​a two-week low on Monday. On the other hand, spot gold was up 0.6 per cent at $4,431.65 an ounce.

Investor sentiment remained extremely fragile amid escalating geopolitical tensions in West Asia, which have once again pushed crude oil prices sharply higher, said Ajit Mishra, SVP of Research at Religare Broking. "Participants are advised to prefer options spreads over naked positions in the index, while maintaining a selective, stock-specific trading approach."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 10,414.23 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 12,033.97 crore on a net-net basis.
 

Nifty50 and Sensex outlook

A long bear candle was formed on the daily chart with gap down opening. This market action signals a decisive breakdown of immediate support around 23,000-22,900 levels. The bearish pattern continued on the daily chart and present weakness could be in line with the new lower bottom of the sequence, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"The underlying trend of the market continues to be down. Nifty is currently placed at the edge of the support at 22,500. Hence, further weakness from here could drag Nifty down to next crucial lower supports of 22,000-21,800 levels in the near term. Immediate resistance is now placed at 22,700-22,800 levels," he said.

The bearish gap in the 23,400-23,600 zone will act as immediate resistance, while 23,900 stands as a stiff hurdle. A decisive move above this zone would be required to signal any meaningful reversal or broad-based buying. A break below 22,900 could trigger further decline towards the 22,700-22,500 zone, said Angel One in its note.

"It remains to be seen whether the market stages a meaningful rebound to defend this long-term average or continues to drift lower amid ongoing global uncertainty. Volatility is expected to remain elevated. Traders are advised to closely monitor the key levels, especially the crucial 22900 mark, and structure their trades accordingly," it added.
 

Nifty Bank outlook

Nifty Bank formed a sizable bearish candle with a lower high and a lower low, signaling continuation of the downward bias for the fifth consecutive week. Volatility is expected to remain elevated in the near term, driven by rising geopolitical tensions, and rising crude oil prices which continue to weigh on overall market sentiment, said Bajaj Broking.

"It breached the support area of 52,500 in yesterday's session and dragged lower below 51,500. A follow through weakness will open further downside towards 50,700 and 50,000 levels in the coming sessions. The daily and weekly oscillators have approached oversold territory. It has immediate resistance at Monday’s gap down area of 53,297-52,665," it added.

Nifty Bank formed a large bearish candle, indicating strong selling pressure. The set-up remains weak, with all key indicators pointing towards sustained bearish momentum, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "The 51,900–52,000 zone will act as an immediate resistance, followed by the psychological 50,000 level in the short term."