Stock market today: Gift Nifty up 91 pts; levels to watch for Nifty, Sensex & Nifty Bank

India's equity benchmarks are likely to open higher on Friday, tracking global gains, as softer US jobs data overshadowed a hotter-than-expected inflation reading and bolstered bets for Federal Reserve rate cuts. Beside this, the ongoing optimism over the US-India trade deal are also supporting the sentiments.

Nifty futures on the NSE International Exchange traded 90.50 points, or 0.36 per cent, up at 25,195, hinting at a positive start for the domestic market on Friday. Asian share markets were higher on Friday as the growing prospect of several more US rate cuts. Hang Seng gained 1.55 per cent, while KOPSI was up 1.25 per cent. Nikkei jumped 0.85 per cent.

The Fed’s stance next week remains the principal external driver, said Siddhartha Khemka, Head of Research of Motilal Oswal Financial Services. "We expect this gradual uptick in the market to continue supported by the government’s GST reforms, expectations of a US Fed rate cut, and improving sentiment around US–India trade talks," he said.

Wall Street's main indexes notched record-high closes on Thursday as US inflation and jobless data fueled expectations that the Federal Reserve will cut interest rates this month. The S&P 500 climbed 0.85 per cent to end the session at 6,587.47 points. The Nasdaq gained 0.72 per cent to 22,043.08 points, while the Dow rose 1.36 per cent to 46,108.00 points.

The dollar remained under pressure on Friday as a surge in US jobless claims and a modest tick up in inflation kept investors zeroed in on likely Federal Reserve interest rate cuts next week and beyond. The dollar index was last trading at 97.585, having snapped a two-day winning streak on Thursday and on track to record its second consecutive weekly decline.

In commodity markets, gold was flat at $3,633 an ounce, just off the record top of 3,673.95 hit early in the week. Oil prices were under pressure after the International Energy Agency predicted an even larger record oil surplus next year as OPEC continues to pump more product. Brent dropped 0.4 per cent to $66.09 a barrel, while US crude eased 0.5 per cent to $62.07 per barrel.

Rotational buying across key sectors and early signs of a reversal in themes like defense and railways are likely to keep the undertone positive, said Ajit Mishra, SVP of Research at Religare Broking. "We continue to advocate a 'buy on dips' strategy in the index and suggest focusing on accumulating quality names across sectors and themes that are moving in line with the benchmark."

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,472.37 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 4,045.54 crore on a net-net basis.
 

Nifty & Sensex outlook

For day traders, the 50-day SMA or 24,900/81,200 would act as a crucial support zone. As long as the market is trading above this level, the bullish sentiment is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

"On the higher side, 25,050/81,700 would be the immediate breakout zone. A successful breakout above 25,050/81,700 could push the market up to 25,150–25,200/82,000-82,200. On the flip side, a move below 24,900/81,200 would render the uptrend vulnerable," he said.

Nifty managed to close above downward sloping trend line resistance on the daily chart. Short term trend of the Nifty remains bullish as it has been holding above 5, 20 and 50 DMA, said Nandish Shah, Deputy Vice President at HDFC Securities. "Immediate resistance for Nifty is seen at 25,153, derived from previous swing high. On the lower side, a level around 24,800 could offer immediate support."
 

Nifty Bank outlook

Nifty Bank has demonstrated a slight outperformance, requiring close monitoring as any subsequent momentum may trigger wider movements in the overall markets, said Osho Krishan, Senior Technical & Derivatives Analyst at Angel One. "Looking at the recent developments, traders are advised to focus on a stock-centric approach with exclusivity in selection from the thematic moves for outperformance in the current scenario."

The 100-day EMA zone of 54,800-54,900 will act as an immediate hurdle for the index. Any sustainable move above the 54,900 level will lead to a further upside rally up to the 55,400 level, said Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities. While, on the downside, the zone of 54,400-54,300 will act as a crucial support for the index, he said.