Nifty, Sensex, Nifty Bank outlook for today: Gift Nifty up 655 points; key levels to watch

Indian equity benchmark indices are set to surge at open on Wednesday, tracking a global rally and a sharp drop in crude oil prices after US President ​Donald Trump agreed to a two-week ceasefire with Iran. Investor focus ‌will be on the Reserve Bank of India's policy decision later in the day.

Nifty futures on the NSE International Exchange were 653.90 points, or 2.82 per cent, up at 23,804, hinting at a positive start for the domestic market on Wednesday. KOSPI zoomed nearly 6 per cent, while Nikkei gained more than 5 per cent. Hang Seng advanced 3 per cent.

Indian markets are set for a strong gap-up opening as the shift reflects a decisive improvement in global risk sentiment following a temporary de-escalation in West Asia tensions. The key trigger is the announcement of a two-week pause in US military action, with volatility is likely to ease in today’s session, said Hariprasad K, Founder at Livelong Wealth.

US stocks ended mixed on Tuesday amid signs of progress ​in negotiations with Iran. The Dow Jones Industrial Average fell 85.42 points, or 0.18 per cent, to 46,584.46, the S&P 500 gained 5.02 points, or 0.08 per cent, to 6,616.85 and the Nasdaq Composite rose 21.51 points, or 0.10 per cent, to 22,017.85. Asian stocks rocketed in the early trade.

A two-week ceasefire between the US and Iran and negotiations to end their conflict may mark the first genuine attempt to de-escalate, but there's still much to be concerned about the world of pain physical oil markets are in. Crude oil futures responded to the news by ​plunging, with Brent contracts dropping as much as 16 per cent to a low of $91.70 a barrel on Wednesday.

Markets shall react first to overnight developments on the ceasefire front and focus will then shift to the outcome of the MPC meeting, amid the uncertain global backdrop, said Ajit Mishra, SVP of Research at Religare Broking. "Traders should maintain a cautious stance, focus on stock-specific opportunities, and continue to manage overnight risks prudently," he said.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 8,692.11 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 7,979.50 crore on a net-net basis.
 

Nifty50 and Sensex outlook

The market opened on a negative note, but successfully cleared the 23,000/74,200 resistance mark, and post-breakout, positive momentum intensified. It formed a bullish candle and is also holding an uptrend continuation pattern on intraday charts, which is largely positive. 23,000/74,200 and 22,900/73,900 would act as key support zones, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"A pullback formation will continue, if the market is trading above these levels. On the higher side, it could bounce back to 23,300/75,000. Upside may continue, potentially lifting the index to 23,450-23,500/75,500-75,700. However, below 22,900/73,900, sentiment could turn negative. Below this level, the chances of hitting 22,700-22,600/73,300-73,000 would increase," he added.

The markets extended their winning streak, with Nifty closing above the 23,000 mark. It is showing early signs of a short-term base formation, supported by a breakout from a falling wedge pattern on the daily chart. Momentum indicators and oscillators have also reversed, indicating a buy crossover, said Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking.

"The positive momentum could continue towards the immediate hurdle of 23,470, and a sustained move above this level may open the door for 24,000 in the near term. Meanwhile, support has shifted higher to around 22,600 levels. The volatility index has also cooled off below 25, and any further decline is likely to provide added comfort to the bulls," he said.
 

Nifty Bank outlook

Nifty Bank has formed a bullish candle with minor lower wick on the daily charts, indicating strong buying interest around day’s low. This keeps the door open for a potential directional move in the sessions ahead, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate resistance for Bank Nifty is placed in the 53,100-53,200 zone. Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 53,500, followed by 53,800 in the short term. On the downside, the zone of 52,300–52,200 zone is likely to act as an immediate support," he added.

Bank Nifty formed a third consecutive bullish candlestick pattern with a higher high and a higher low signalling continuation of the pullback from the extreme oversold territory. Index witnessed a strong pullback in the second half to close the session on a positive note. Volatility is likely to remain elevated in the near term, said Bajaj Broking.

"On the downside weakness below the psychological 50,000 levels will signal extension of the decline towards the 200 weeks EMA placed around 48,900 levels in the coming weeks. For any meaningful pause in the ongoing downtrend, the index needs to establish a sustained pattern of higher highs and higher lows in the daily chart, along with a close above recent high of 54,150," it adds.