Stock market today: Gift Nifty up 3 pt; key levels to watch for Nifty, Sensex & Nifty Bank

Indian stock benchmark indices are poised to open little changed on Tuesday, mostly on a muted note, after two sessions of profit-taking from levels that were close to record highs, on caution before key US data. Market sentiments may remain cautious over November series F&O contracts expiry due today.

Nifty futures on the NSE International Exchange traded 3.10 points, or 0.01 per cent, up at 25,999.50, hinting at a flat start for the domestic market on Tuesday. Asian share markets rallied on Tuesday as hopes grew the Federal Reserve will deliver a December interest rate cut. Hang Seng and KOSPI were up a per cent each, while Nikkei added two-third a per cent.

In the absence of major domestic macro announcements until the GDP numbers on Friday, market sentiments are likely to remain cautious until we see some progress on the India US trade talks, while fluctuating foreign flows could add to interim volatility, said Siddhartha Khemka, Head of Research of Motilal Oswal Financial Services.

Wall Street stocks closed higher on Monday, extending Friday's rally. The Dow Jones Industrial Average rose 202.86 points, or 0.44 per cent, to 46,448.27, the S&P 500 gained 102.13 points, or 1.55 per cent, to 6,705.12 and the Nasdaq Composite jumped 598.92 points, or 2.69 per cent, to 22,872.01.

The sudden shift in rate cut wagers have weighed slightly on the dollar. The dollar index was at 100.2 in early trading. US stock and bond markets will be closed on Thursday for the Thanksgiving holiday and will trade for half a day on Friday.

In commodities, Oil prices were little changed on Tuesday after rising in the previous session as concerns supply will exceed demand next year. Brent crude futures were down 0.2 per cent at $63.16 a barrel, while US crude futures were also off 0.2 per cent at $58.70 per barrel. Spot gold was 0.2 per cent lower at $4,130 an ounce.

The muted performance was driven by risk aversion amid global uncertainties and continued FII selling. With the monthly expiry scheduled for Tuesday, volatility is likely to remain elevated, said Ajit Mishra, SVP of Research at Religare Broking. "Participants should maintain a stock-specific approach and use dips or periods of consolidation to gradually accumulate quality names."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,171.75 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,512.87 crore on a net-net basis.
 

Nifty & Sensex outlook

26,000/85,000 would act as a trend decider level. As long as the market is trading below this level, weak sentiment is likely to continue on the downside, and the market could slip till 25,900–25,850/84,700-84,500, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"On the flip side, if it moves above 26,000/85000, it could bounce back to 26,150–26,200/85,500-85,700. The intraday market texture is volatile; hence, level-based trading would be the ideal strategy for day traders," he added.

Nifty has closed below its 50 EMA on the hourly chart and slipped under the strong 26,000 support near its 10-day EMA, forming a bearish candlestick and signaling short-term weakness, said Vatsal Bhuva, Technical Analyst at LKP Securities. "A retracement is likely if the index opens or closes below the 10-day EMA at 25950, which could push it toward the 20-day EMA placed at 25,850."
 

Nifty Bank outlook

The 20-day EMA zone of 58,400–58,300 will act as a critical support for Nifty Bank. A sustained move below 58,300 could trigger further downside towards 57700, indicating a deeper correction, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "On the upside, the 59200–59300 zone will serve as a key hurdle, and only a decisive breakout above this range can revive bullish momentum in the banking space." '

Bank Nifty formed a bearish candle with a lower high and lower low highlighting extension of the profit booking for the second session in a row. Index is seen consolidating above the recent range breakout area (57,300-58,500). Overall bias remains positive above the breakout area of 58200-58,500, said Bajaj Broking.

"We expect it to retain its positive momentum and move towards the 59,800 level in the coming weeks, based on the measuring implication of the recent range breakout. The 58,200–58,000 zone is likely to act as a crucial support area, with the previous resistance now expected to serve as support," it adds.