Stock market today: Gift Nifty down 215 points; key levels for Nifty, Sensex & Nifty Bank

Indian equity benchmark indices are set to open lower on Friday, setting the stage for their biggest weekly drop in more ​than a year, as the escalating Middle East conflict lifts Brent crude ‌and forces investors from risky assets into cash. Brent crude oil is hovering $100 per barrel, while the drop has ​been accompanied by heavy foreign investor selling.

Nifty futures on the NSE International Exchange were 223 points, or 0.94 per cent, up at 23,505.50, hinting at a negative start for the domestic market on Friday. Asian stocks slumped on Friday, poised for a second straight weekly decline. Nikkei and KOSPI dropped more than a per cent, while Hang Seng edged lower.

Strikes on oil & gas vessels added to supply worries amid the ongoing US–Israel conflict with Iran, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "Indian equities are likely to remain volatile, influenced by developments in the West Asia conflict, sharp movements in crude oil prices and continued foreign fund outflows."

US stocks fell on Thursday as Iranian strikes kept crude prices near $100 per barrel exacerbating inflation ‌ fears and investors fled from equity markets. The Dow Jones Industrial Average fell 739.42 points, or 1.56 per cent, to 46,677.85; the S&P 500 lost 103.22 points, or 1.52 per cent, to 6,672.58 and the Nasdaq Composite tanked 404.15 points, or 1.78 per cent, to 22,311.98.

Oil prices remained close to the closely watched $100 per barrel level, although they eased a bit in early trading on Friday after the US issued a 30-day license for countries to buy Russian oil and petroleum products currently stranded at ​sea. Brent futures were last at $99.85 a barrel, while West Texas Intermediate crude was at $95.05 a barrel.

The US dollar has become the safe-haven of choice during the tumult, putting most ‌other currencies under pressure. The dollar was set for a second consecutive week of gains and is up 2 per cent since the war broke out at the end of February. Gold was 0.7 per cent higher at $5,114 per ounce on Friday but set for a 1 per cent drop for the week.

The lack of de-escalation signs in Middle East geopolitical tensions continued to unsettle global markets and push crude oil prices higher. Elevated volatility further dampened risk appetite among market participants, said Ajit Mishra, SVP of Research at Religare Broking. "Traders should maintain a balanced approach and consider opportunities on both the long and short sides."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 7,049.87 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 7,449.77 crore on a net-net basis.
 

Nifty50 & Sensex outlook

The market trimmed some losses but again corrected sharply due to profit booking at higher levels. It is forming a lower top on intraday charts, which suggests that the correction wave is likely to continue in the near future, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"23,850/76,700 would act as a trend decider level. Below this, the market could slip to 23,500-23,350/75,700-75,300. On the flip side, above 23,850/76,700, a pullback move could extend to 24,000-24,100/77,000-77,500. The intraday market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy for traders," he said.

Sentiment continues to support a bearish view in the short term, with 'sell-on-rise' strategy can be preferred. The RSI indicator is in a bearish crossover and is declining further, entering a zone of significant weakness. On the lower end, support is placed at 23,400 / 23,200, while on the higher end, resistance is seen at 23,850, said Rupak De, Senior Technical Analyst at LKP Securities.

A small negative candle was formed on the daily chart with upper and lower shadow. This market action signals a formation of high wave type candle patterns at the swing lows. The current market action reflects volatility at the lower support. Positive divergence pattern has also started to form in Nifty/daily RSI, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

"The underlying trend of the Nifty remains weak. But the overall chart pattern indicates a possibility of lower bottom formation around the supports of 23,500-23,400 in the short term. A sustainable move above the hurdle of 23,850 could confirm reversal on the upside," he said.
 

Nifty Bank outlook

Nifty Bank formed a high wave candle with a small real body and shadows in either direction signaling continuation of the corrective decline. Market volatility is also expected to remain elevated due to uncertain global cues, rising crude oil prices, and escalating geopolitical tensions, which may continue to weigh on the banking stocks and the broader equity market, said Bajaj Broking.

"Technically, the short-term bias remains negative as long as the index trades below the 56,500 mark. Failure to reclaim this level could lead to further downside in the coming sessions, with the index potentially drifting towards the 100-week EMA, which is placed around the 54,000 level," he said.

All key moving averages and momentum indicators continue to signal a bearish bias. The 54,600–54,500 zone will act as a crucial support for Nifty Bank, said  Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities. "A sustained break below 54,500 could extend the decline towards the 53,900 level. On the upside, the 55,500–55,600 zone will remain key resistance."