Stock market today: Gift Nifty up 89 points; key levels to watch for Nifty & Nifty Bank

India's equity benchmark indices are poised to open higher on Thursday after three sessions of losses, buoyed by the US Federal Reserve's widely expected 25-basis-point rate cut, which could limit foreign outflows from domestic stocks. Lower interest rates in the US make emerging markets such as India more attractive to foreign investors.

Nifty futures on the NSE International Exchange traded 89.10 points, or 0.35 per cent, up at 25,953, hinting at a positive start for the domestic market on Thursday. Asian markets opened mostly higher, supported by the Fed's policy. Hang Seng added 0.2 per cent, while KOSPI was flat. Nikkei posted some cuts.

Wall Street ended higher on Wednesday, after the Federal Reserve cut interest rates by a quarter percentage point on the expected lines. The S&P 500 closed up 46.17 points, or 0.67 per cent, at 6,886.68; the Dow Jones Industrial Average rose 497.46 points, or 1.05 per cent, to 48,057.75; the Nasdaq Composite gained 77.67 points, or 0.33 per cent, to 23,654.16.

The dollar fell on Thursday after the Federal Reserve delivered an outlook that was not as hawkish as some had anticipated, giving investors confidence to short the currency as they bet on two more rate cuts next year. Against a basket of currencies, the dollar fell to its lowest since October 21 at 98.543.

Oil rose for a second straight session on Thursday after the US seized a sanctioned oil tanker off Venezuela’s coast, escalating tensions between the two countries and raising concern over further supply disruptions. Brent crude futures rose 27 cents, or 0.4 per cent, to $62.48 a barrel, and US West Texas Intermediate crude was at $58.79 a barrel, up 33 cents, or 0.6 per cent.

"We recommend maintaining a stock-specific trading approach until clarity emerges, with buying opportunities in private banks, autos, and metals, while also keeping selective short positions as a hedge against potential downside risk, said Ajit Mishra, SVP of Research at Religare Broking.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,651.06 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 3,752.31 crore on a net-net basis.
 

Nifty50 outlook

Technically, Nifty holds immediate support at 25,600–25,650, with strong resistance continuing at 25,850–25,900, a region that has repeatedly capped upside attempts, said Aakash Shah, Technical Research Analyst at Choice Equity Broking. "Overall, the market tone remains cautious to mildly bearish. Sustained support at key levels will be crucial," he said,

After an initial bounce, Nifty50 resumed selling pressure and eventually settled on a bearish note at 25,758. On the daily chart, Nifty formed a bearish candle, reflecting weakness, said Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C Mehta Investment Interrmediates.

"Trend line support for the Nifty is placed near the 25,700 level. A decisive break below 25,700 will drag the Nifty towards the 25,500–25,300 levels. On the upside, 26,000 and 26,325 will act as strong hurdles. Thus, short-term traders are advised to adopt a sell-on-bounce strategy," he adds.
 

Nifty Bank outlook

Nifty Bank formed a bearish candle highlighting consolidation around the 20 days EMA. 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."

Key short-term support is placed at 58,200-58,600 levels being the confluence of the recent low and the major breakout area. A breach below the same will signal a pause in the short term up trend. On the higher side 59,500 is the immediate resistance while key hurdle remains at the recent all time high of 60,100, it adds.

The zone of 58,800–58,700 zone is likely to act as an important support zone for Nifty Bank. Any sustained move below 58,700 could lead itmoving down, potentially taking it lower towards 58,500 followed by 58,100, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. "On the upside, the zone of 59,300-59,400 is likely to act as an immediate resistance."