Stock market today: Gift Nifty down 58 points; key levels for Nifty, Sensex & Nifty Bank

India's equity benchmarks are set for a muted start on Wednesday, mirroring Asian peers, as investors await the U.S. Federal Reserve's rate decision later in the day. Traders will also be looking at developments around the US-India trade deal amid weakening rupee and consistent FII selling.

Nifty futures on the NSE International Exchange traded 58.20 points, or 0.22 per cent, down at 25,902, hinting at a negative start for the domestic market on Wednesday. Asian shares were on the mixed grounds on Wednesday. Nikkei was trading flat, while KOSPI edged lower. Hang Seng shed nearly half a per cent.

"We expect the headline indices to remain range-bound in the near term, with stock-specific action and the broader market recovery likely to continue. Markets will track global cues while awaiting the Fed’s policy stance for further direction," said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

The US stocks ended Tuesday's session with mixed cues as investors anticipated a hawkish tone by the Federal Reserve. The Dow Jones Industrial Average fell 179.03 points, or 0.38 per cent, to 47,560.29, the S&P 500 lost 6 points, or 0.09 per cent, to 6,840.51 and the Nasdaq Composite gained 30.58 points, or 0.13 per cent, to 23,576.49.

The rise in yields has put a prop under the dollar, further assisted by a broad bout of selling in the yen overnight which looked to be driven by momentum-tracking funds. The dollar index was firm at 99.23. On the other hand, the Indian rupee may open slightly weaker on Wednesday, tracking subdued regional peers.

Silver was again the star in commodities, having cleared the $60 barrier to reach a record $61.02 per ounce. The metal has more than doubled in price this year as inventories dwindled and a bullish trend drew demand from momentum funds. Gold was quieter at $4,212 an ounce, having peaked at $4,381 back in October.

In other commodities, Oil prices steadied, having lost ground early in the week when Iraq restored production at Lukoil's West Qurna 2 oilfield, one of the world's largest. Brent edged up 0.2 per cent to $62.07 a barrel, while US crude rose 0.2 per cent to $58.39 per barrel.

Sentiment remained fragile due to global Fed jitters ahead of the policy announcement, along with fresh tariff concerns, while persistent FII outflows and the rupee’s slide past 90 continued to add to investor anxiety, said Ajit Mishra, SVP of Research at Religare Broking. "We advise traders to keep position sizes in check and wait for clearer signs of stability."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,760.08 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,224.89 crore on a net-net basis.

 

Nifty50 & Sensex outlook

We are of the view that the current market texture is weak but oversold, hence we could see an extension of the pullback rally in the near future. For day traders, 25,750/84400 would act as a key support zone. As long as the market is trading above this level, the pullback formation is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"On the higher side, 25,950/85,000 and 26,000/85,200 would be immediate resistance areas for the bulls. On the flip side, below 25,750/84,400, the selling pressure is likely to accelerate. Below this, the market could retest the level of 25,650/84,000," it adds.

The markets remained under pressure for the second straight session, and Nifty formed a Doji-like candle on the daily chart, highlighting clear indecision among traders, said Nilesh Jain, Head of Technical and Derivatives Research Analyst at Centrum Broking.

"The index also broke down from a rising wedge pattern, placing stiff resistance at 26,000, which aligns with the 21-DMA. On the downside, the next key support lies at the 50-DMA near 25,670. Overall, the setup appears sideways, and traders should remain cautious as long as Nifty stays below the 26,000 mark," he adds.

Nifty Bank outlook

The banking benchmark index, Bank Nifty, slipped below its 20-day EMA at the opening but managed to close the session above this key level, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"On the daily chart, it has formed a bullish candle with a minor upper shadow, indicating some buying interest despite early weakness. Going ahead, the zone of 58900-58800 will act as crucial support for the index. While on the upside, the zone of 59600-59700 will act as an important hurdle," he adds.

Bank Nifty has formed a bullish candle highlighting consolidation around the 20 days EMA amid stock specific action ahead of the US FOMC rate decision. Index on expected lines is seen consolidating and forming a base in the range of 58,500-60,100, said Bajaj Broking. "We expect the index to extend the current consolidation in the coming sessions."

Only a follow through strength above the last week high will open further upside towards 60,400 and then towards 61,000 levels in the coming weeks. Key short-term support is placed at 58,200-58,600 levels being the confluence of the recent low and the major breakout area, it added.